Tesco’s expansion into broadband, telephony and mobile stepped up a gear
this week with the launch of a range of combined broadband and home phone packages
for the first time. In a two pronged attack it also announced plans to open a total of 500 in-store phone shops.
The strategy, revealed by Tesco chiefs this week at its two day seminar, throws
down the gauntlet to rivals BT, Virgin Media,TalkTalk and Carphone Warehouse
Tesco announced a five-year deal this week with Cable & Wireless to
supply the supermarket chain with wholesale broadband services.
The supermarket chain will also double its number of in-store phone shops in
to 200 by the end of 2010 and a total of 500 by 2015.
Tesco is predicting revenue of £2bn and profits of £200m annually from its telecoms
The strategy is part of Tesco’s wider plans to grab ever more market share
in the UK’s
broadband and fixed telephone markets, estimated to be worth about £8.8bn a
year, in total.
Tesco said 'significant customer dissatisfaction with service and
expertise' from broadband providers, presented a 'huge
opportunity' for the company.
It said its deal with Cable & Wireless will enable it to become the 'number one broadband and home phone choice for Tesco shoppers'. It
expects to offer broadband speeds of up to 16Mb.
Tesco telecoms customers will have their accounts moved to the new network
over the next few weeks, and the services will be rolled out to new customers
The company will offer a range of bundles for clubcard holders and customers
buying computers and telephones at Tesco.
Lance Batchelor, head of Tesco telecoms, said: 'We are actively looking
at rolling out our telecoms proposition worldwide and there are conversations
under way with potential suppliers for mobile and broadband.'
The company said the deal would enable it to branch out beyond its mobile
network, Tesco Mobile, which was launched with O2 in 2003 and recently expanded
from pay-as-you-go deals to offer contracts.