According to a report by The Telegraph, UK-based telecom giant Vodafone Group Plc. (VOD) is negotiating with the British Sky Broadcasting Group Plc. (BSkyB) to resell Sky’s Now TV set-top box (STB) along with its upcoming fixed broadband network offerings.
Vodafone has decided to offer fixed-line broadband (Internet) and TV services to its residential customers in the UK from the spring of 2015. The strategy aims at minimizing customer churn rate as an increasing number of the company’s subscribers are opting for the bundled services of its competitors.
Vodafone is already offering Sky Sports Mobile TV to its 4G LTE subscribers in the UK. Moreover, beginning this month, Vodafone has also started offering mobile version of Now TV to its 4G LTE customers. Some industry rumors also hinted that BSkyB may install a MVNO (mobile virtual network operator) service in the UK using the wireless network of Vodafone.
Vodafone expects the fixed broadband service introduction in the UK to help the company maintain its position in the wireless market. Previous to this, Vodafone provided fixed broadband service in the UK using BT Group Plc.’s (BT) network. However, the agreement came to an end in late 2011. Last month, the company became the first wireless carrier in the U.K. to commercially launch LTE-A (Long-Term Evolution Advanced) service.
Outside the UK, the company has been enjoying strong fixed Internet operations in Germany since it acquired Kabel Deutschland. Vodafone is also building a fiber-to-the-home network in Spain in collaboration with Orange (ORAN).
Recently, Bloomberg reported that Vodafone is considering acquiring a stake in the Italian fiber-optic operator, Metroweb SpA. Holding a sizable stake in Metroweb will place Vodafone in a better position to compete with Italy’s largest telecom carrier Telecom Italia SpA. (TI). Meanwhile, Telecom Italia has also expressed its desire to acquire Metroweb. Vodafone currently carries a Zacks Rank #3 (Hold).
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