Tesco poised to shake up the UK broadband market

Thu 19 Nov 2009 2 Comments

Tesco looks set to take on some of the most powerful broadband providers in the UK within the next few months as it braces itself to move into the bundled consumer broadband market.

As part of a five year deal the supermarket has announced it's made an agreement with Cable&Wireless to receive wholesale broadband services without relying on some of the more prominent UK providers. This important move gives the supermarket the opportunity to deliver a wider mix of bundled broadband deals including home phone services, potentially force industry prices down as well as setting a popularity challenge to competing providers.

Tesco isn't new to the broadband market by any means. It previously offered up broadband deals in collaboration with Virgin Media. But now, with no ties to any of the major UK internet service providers, it has been given the freedom to use its hefty retail presence to compete in the communications market with a bit more weight. Currently, Tesco takes approximately one in every three pounds spent in the the British grocery market.

Speaking on the state of the British broadband market, Tesco telecoms chief Lance Batchelor reported the fixed telephone and broadband markets, estimated to be worth around 8.8 billion pounds a year, was only running at 20 per cent. For him, this means there's plenty of space for Tesco to grow beyond groceries.

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Comments

  • neutral

    by Chris Pearson at 15:55 on 23 Nov 2009Report abuse

    Well I wish them luck. In my experience, unless they are only going to offer sevice in cable areas, they will be deluged with complaints from customers complaining about slow internet. And they will soon find out that those customers are the ones stuck with a non LLU exchange(ie BT are the sole supplier) and that BT will call the shots and do nothing to improve matters. Mind you, a corporate battle between Tesco and BT might be a good spectator sport.....

  • happy

    by peter weatherstone at 23:20 on 26 Nov 2009Report abuse

    I hope to gods sake that tesco use their massive revenues and plough the profits they have into building upon the fibre optic network... although a lot of people dont have access to cable makes me think there going to be a crappy adsl service like the rest...

    Im on virgin, who are great to be honest... a lot of people complain here and there, but were all human, its not like everyones perfect, and since we all run businesses, there not going to be any more perfect either lets be honest...

    But if they start doing like the supermarkets do every week for deals, i see a nice price war starting again like talktalk did with free broadband, and now look.... 8mb is as low as ever on adsl, and companies are forced to make bigger speeds to make the premium prices stay as they were...

    Bring on TESCO, end all the adsl and fibre optic lives, and bring me closer to someone releasing 100mb broadband and more!

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