Vodafone's DSL is Not a "Me too" Approach

IanFogg | September 11, 2006, 01:01 PM

Today Vodafone announced heads of agreement with BT Wholesale to offer broadband services in the UK.

This isn't a "me too" offer, although mobile competitors Orange, Virgin and O2 have previously shown their hand.

Vodafone is clearly aware of how fierce competition in the UK broadband market has become and is minimising its capital investment and risk. With European residential broadband access arpu set to fall 54 percent, the investment return on LLU, with so many UK LLU players is far from certain. Its competitors are following the other path.

If Vodafone is a sheep, its colour is black.

And, there is nothing I can see here that would preclude Vodafone from adding a second wholesale provider, or even bar Vodafone from investing in LLU at a later date. This is a sensible first move for Vodafone in DSL.

The most common mobile operator strategy on fixed broadband is infrastructure investment and ownership:
- Orange is investing in LLU.
- O2's parent, Telefonica has purchased LLU provider Be.
- MVNO Virgin, is part of cable operator ntl.
- MVNO Fresh, is offered by Carphone Warehouse, one of the free fixed broadband crowd.

So far, just T-Mobile and 3 are yet to announce a UK fixed broadband strategy.

Elsewhere in Europe, Vodafone is doing what it said it would at its AGM, and is tailoring its fixed broadband market entry strategy to local country conditions.

This is both highly pragmatic and differentiated from the zeal of other operators.