The UK mobile network operator Vodafone has announced that it will be launching broadband and TV services in spring 2015.
Vodafone shares jumped up by more than 5.5% after the announcement, which included the news that its full year core earnings forecast was between £11.6bn and £11.9 bn.
The mobile network giant will use its BT infrastructure and business fibre network to provide the TV and broadband services, it said.
Vodafone will find itself competing in an already very crowded market, which includes EE, BT, Virgin and Sky. However, Vodafone said that it had access to fibre which passes over 42 million homes, which equates to a total of 29% of households in Europe. The firm claimed that already there were 4.4 million households already that use its broadband service in Portugal, Ireland, Spain, the Netherlands and Italy.
Talking to the BBC , Mark Newman, chief research officer at Ovum, said: "Vodafone will need to compete on price or on service, and it will be very tough for them to do that.”
Newman added that when a company is not the first or second to enter a market, it becomes very difficult to compete, because existing customers do not tend to change service.
However, Point Contact’s telecoms analyst Oliver Johnson said that the security of Vodafone’s long-term revenues depends upon the quality of the broadband and TV service and how well it enables the different devices in people’s homes to "talk” to one another, something that consumers are increasingly coming to expect.
"This is where the real emerging markets are going to come,” Johnson said. "People want to switch the alarm on, order bits for the fridge, monitor their health, and record their favourite TV program. It all starts to get stuck together.”
Pricing and TV content has yet to be announced.