Vodafone UK Launches New Broadband Switching Campaign

Today, Vodafone UK launched a new broadband campaign intended to lure customers from rival providers.

Dubbed the Great British Telecoms Switch, it highlights that Vodafone uses the same Openreach network as major competitors such as BT, EE and Sky, meaning it can offer a very similar broadband service for what it claims is a lower price.

With over 1.3 million customers, Vodafone has made solid progress in the competitive UK broadband market since launching in 2015. But it still lacks scale compared with its rivals.

Now, it’s looking to build on existing efforts to cross-sell broadband to its mobile customers by more assertively targeting those using other broadband providers.

Customers at BT appear most in its crosshairs. Vodafone says that 8 million BT customers are overpaying by more than £200 a year on average compared with Vodafone’s equivalent broadband packages. That adds up to £1.1 billion each year, it claims. If it can tempt just a small proportion across, its market share could see a major boost.

One of the main barriers to switching is that people are locked into long-term deals. To help overcome this, Vodafone plans to offer up to £100 to cover exit fees for anyone leaving a rival and signing up to its Pro II Full Fibre 900 deal.

However, breaking a contract can be very expensive, so I don’t see much of an incentive here. People are probably better off waiting for their existing deal to expire and then considering their options.

Vodafone’s campaign is also timed to coincide with the date on which Ofcom’s One Touch Switch (OTS) process ought to have come into force. The scheme aims to make it quicker and easier for residential broadband customers to change their provider as they’re only required to contact the new provider to make the switch. According to Ofcom, four in 10 people considering switching are put off by having to speak to both their old and new providers.

However, implementation of OTS has been beset by delays. First discussed in 2019 as part of a broad package of consumer protection rules, Ofcom decided to go ahead with the scheme in September 2021. After the industry missed the original April 2023 deadline, Ofcom launched an enforcement programme and pushed the date back to March 2024.

Vodafone says it’s ready for OTS, but others are yet to come on board. In this sense, its campaign is about more than just enticing new customers; it also aims to push other providers to comply with Ofcom’s rules.

Earlier this week, Ofcom confirmed a new planned implementation date — September 2024. It said it has received written assurances from BT, Sky, TalkTalk and Virgin Media O2 that the new deadline is achievable. Once OTS is launched, Ofcom will decide whether to open investigations into individual providers’ compliance.

I’m not expecting Vodafone’s campaign to focus solely on price. Its Pro II Broadband offer uses Wi-Fi 6E technology, bringing a significant speed advantage compared with earlier Wi-Fi releases. Furthermore, the use of boosters helps extend signals throughout the home, and 4G backup offers reassurance if an Internet service goes down. Vodafone will also want to promote its Xtra broadband plans, which offer Apple TV 4K and a subscription to Apple TV+.

Vodafone is also preparing to launch a 2.2 Gbps broadband service using the CityFibre network. This will up the ante after Virgin Media O2 launched a residential 2 Gbps service in February, albeit only to about 1 million customers as part of its partnership with nexfibre. Next month, Openreach will debut two new tiers to offer download speeds of 1.2 Gbps and 1.8 Gbps, available across the Openreach network, which now reaches 13 million premises.

In another recent disruption to the UK broadband market, Virgin Media O2 confirmed the creation of a new “netco” subsidiary to house its cable and fibre-line assets. This is significant as it enables Virgin Media O2 to move into the wholesale fixed-line market for the first time, bringing direct competition to Openreach. Vodafone would be an obvious potential customer, having indicated in the past that it would consider taking on another partner for its broadband business to expand its presence.

The launch of the Great British Telecoms Switch is just the latest development in the vibrant and increasingly competitive UK broadband market. CCS Insight will continue to monitor it closely.