Service Convergence in the UK Poised for Next Wave of Growth

Service convergence has been a buzz term in telecom for years, particularly in Europe. However, industry momentum has stalled in recent times as operator strategies have largely failed to evolve beyond simple cross-selling.

In its broadest definition, service convergence refers to the bundling of fixed-line and mobile offers, sometimes also with TV or other content, and occasionally including other add-ons such as smart home, security, cloud gaming and financial services.

In the UK, adoption remains adrift of other European markets: only about a third of households have a home broadband service and at least one contract mobile connection from the same provider, according to analysis from CCS Insight. This is well behind other markets, like Spain at over 80%.

This is a legacy of market structure and operators’ tendency to focus convergence offers on premium customers. However, much-needed fresh impetus could finally be on the way: some established providers are revamping their strategies as entrants seek ways to disrupt.

A recent Insight report from CCS Insight evaluates the market. It reviews the UK’s journey so far; assesses the approaches being taken by each of the major players in convergence (BT, Virgin Media O2, Sky and VodafoneThree); and considers opportunities for others to make a mark, such as mobile virtual network operators (MVNOs), sub-brands and alternative fibre providers.

Our consumer research suggests that the simplest path to new growth is through more-attractive offers and more-targeted cross-selling. This would mark an evolution from the traditional focus on the higher end of the market and could lay the foundations for more adventurous strategies.

UK operators have mostly resisted the temptation to assertively target the mass market for fear of eroding value. However, recent market developments hint at a possible change of direction.

Notably, the newly formed VodafoneThree recently outlined plans to cross-sell home broadband services to mobile customers. It already claims the widest full-fibre coverage in the UK thanks to wholesale agreements with Openreach and CityFibre and can now add Community Fibre to that roster following a new partnership announced with the “altnet”. By folding in Three’s fixed wireless access service, it expects to cover all homes and businesses in the UK with “fibre or fibre-like speeds”, although it doesn’t attach a date to this claim.

Smaller rivals have also spied an opportunity. In April 2025, after months of speculation, Virgin Media O2 sub-brand giffgaff confirmed a move into the broadband market. No date has been set, but it’s currently recruiting 500 trialists to help shape an offer. I’d expect a no-frills service aimed at the operator’s 4 million-plus mobile customers.

Another player to watch is YouFibre, one of the retail brands of altnet Netomnia. In a recent interview, CEO Jeremy Chelot said YouFibre plans to offer a mobile service in 2025 as part of a strategy to broaden its reach. I’m also keeping a watch on Yayzi Broadband, which wholesales fibre access from CityFibre and others, and introduced a mobile service on the Three network in November 2024.

Fresh competition could have been one of the spurs for EE to push its latest bundled offer, EE One. As part of the programme, customers taking both home broadband and pay-monthly mobile receive a boost to unlimited data on eligible mobile plans of £10 per month or more. After a lengthy period of painfully slow customer growth in converged services, EE enjoyed its highest quarterly intake for many years during the first quarter of 2025 (BT’s fiscal 4Q24/25).

Operators have other levers to entice customers beyond just offering better value. The CCS Insight report evaluates some of these, such as consolidating billing and customer care; offering more flexible tariffs with greater levels of personalization; incorporating management tools such as parental control into broadband and mobile services; and pushing into new sectors like insurance, security, gaming and energy.

In the long term, I see the ultimate goal of convergence as the creation of a near-seamless experience throughout every aspect of an operator’s service. In this sense, it could be almost impossible to distinguish between enabling technologies such as fibre, cellular and Wi-Fi. However, this concept seems a very long way from reality, particularly considering the many different brands on the market.

For now, simpler, lower-priced and more-flexible plans, supported by targeted cross-selling, should stimulate long-overdue growth. With competition building, this part of the market finally appears set for its next wave of growth.

CCS Insight’s report on the market for converged services is available to clients here. Contact us if you’d like to receive a copy.