Vodafone takes on rivals Sky and Virgin with complete bundle of telecom services

(PA)

Vodafone is to launch home broadband and TV for British customers in the first half of next year in a watershed moment as the mobiles giant looks to take on Sky, BT, Virgin Media and TalkTalk by offering a complete bundle of telecoms and TV services.

Shares in the FTSE 100 giant surged 5.5 per cent to a six-month high as Vodafone also reported a strong improvement in revenue across virtually all its key European markets.

Chief executive Vittorio Colao said Vodafone would use its own fixed-line fibre broadband network, acquired with the 2012 purchase of Cable & Wireless Worldwide, as well as getting wholesale access to BT’s pipes so his customers can get home broadband.

He declined to say yet whether Vodafone has reached a deal with Sky or BT to carry its TV channels but the mobiles giant already has a deal for UK customers to watch Sky Sports video clips on their phones.

Vodafone, once only a mobiles carrier, has already been expanding in Germany and Spain by offering a “quad play” of services encompassing broadband, TV, home phone and mobile.

Toby Syfret of Enders Analysis said the convergence of TV, internet and mobile was a key factor. “It’s an inevitable trend that if you’re going to offer telecommunications, you’re going to offer video communications,” he said. “You want to be able to package it together.”

Vodafone’s profits in the six months to September slumped by 73 per cent to £406 million on sales of £19.1 billion as it invested in upgrading its network, which meant that it paid no corporation tax in the UK for the period.

But investors were cheered as revenues fell 1.5 per cent in the last three months, markedly better than the 4.2 per cent slump in the previous quarter. The shares rose 11.5p to 219.35p.