Vodafone’s UK broadband plan to counter BT: “If they come harsh on mobile, we will come harsh”

Oliver Smith
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Voda­fone increased its 2014 results guidance yesterday
Vodafone is preparing to take BT head on next year, when it launches broadband and TV offerings in the UK to challenge the former state monopoly’s plan to encroach on its turf with a mobile service.

Chief executive Vittorio Colao did not say how Vodafone would price its broadband or TV when it launches in spring 2015, but said the move was in direct response to BT’s mobile plans.

“To be honest, it’s more of a defensive, reactive move,” Colao told reporters, following Vodafone’s first- half results yesterday.

“We will follow whatever they [BT] do and the level of aggressiveness in their pricing. Of course, if they come harsh [cheap] on mobile, we will come harsh… The profit pool of TV is big, the profit pool of fixed-line [broadband] is big as well, bigger than mobile.”

The announcement came as Voda­fone increased its 2014 results guidance yesterday as improving demand in its big European markets and an investment push into new products helped to reduce a drop in revenues.

It now expects its full-year core profits to be between £11.6bn and £11.9bn, compared with the previous guidance of £11.4bn to £11.9bn.

Vodafone’s group revenue still fell three per cent to £20.7bn during the six months to 30 September, beating expectations of a larger fall, with profits dropping 73 per cent to £406m as the group invested in upgrading its network. Vodafone’s shares rose 5.4 per cent to 219.05p yesterday.

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