(Associated Press via NewsEdge) Vodafone is entering Britain's crowded fixed-line broadband Internet market after striking a deal with BT Group.
The agreement means that Vodafone, the world's biggest mobile phone operator by sales, will be able to offer bundled mobile phone and broadband service packages later this year.
The move was widely anticipated after the company said in May that it planned to expand beyond mobile operations.
'Today's announcement is a strategically important step in the evolution of Vodafone's business in the UK,' said Nick Read, Vodafone's CEO.
Vodafone until recently prided itself on being a 'pure-play' mobile operation, without the costs of a declining fixed-line business. However, it changed tack as fixed and mobile businesses moved to cheaper, combined services.
The deal with BT sets Vodafone apart from most other new entrants to the broadband arena because it involves renting capacity from BT's wholesale wing.
Rivals like British Sky Broadcasting Group, Telefonica unit O2 and France Telecom subsidiary Orange have all decided to put their own technology and hardware in BT local exchanges, a process known as local loop unbundling.
The deal is also a blow to struggling fixed-line firm Cable & Wireless, which had hoped to carry Vodafone's traffic on its Bulldog network.
Vodafone has been struggling amid tough European trading conditions. Company CEO Arun Sarin has come under fire from shareholders in recent months because of a lackluster share price performance and a widespread perception that Vodafone still lacks a credible strategy for further growth.
© 2006 The Associated Press
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