Tesco plans to carpet bomb broadband market

Tesco plans to carpet bomb broadband market

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 the UK 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 business.

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 next year.

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.

Written by Mobile Today
Mobile Today

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