Vodafone is considering offering video on demand as part of its entrance into Britain’s broadband market.

The mobile group, which yesterday unveiled details of its broadband offering, told The Times that, although plans were at an early stage and it had not yet decided which services it will offer, broadband television might fit well with its mobile TV offering.

If Vodafone chooses to offer video on demand, it would be competing directly with BT, which is due to launch BT Vision, its video-on-demand service, early next month.

“We are looking at how we can provide services on both broadband and mobile,” Tim Yates, director of Vodafone’s UK consumer business, said.

Vodafone said yesterday that it will launch a £25-a-month broadband package for its mobile phone customers on January 8, making the first installations in mid-January. If customers cancel their mobile phone contract, broadband will be charged at £35 per month for the rest of the contract.

Vodafone is entering a broadband market that has become crowded and intensely competitive, forcing the exit of several leading players already, yet Mr Yates said that “as a recognised provider of mobile communications, it was a logical step for us”.

BSkyB, which is 39.1 per cent owned by News Corporation, parent company of The Times, recently announced that its newly launched, heavily discounted products had attracted a lot of interest. Last week the satellite broadcaster reported that more than one million initial registrations of interest in its Sky Broadband service had resulted in more than 113,000 orders.

Mr Yates said that the quality of Vodafone’s broadband offering, features of which would include 24-hour phone support and internet security software, would be enough to encourage many of its 3.5 million contract customers to sign up.

However, the mobile operator declined to provide any predictions on how many customers it hoped to win in the next year.

Mr Yates said that eventually the group could offer bundled services, in which customers would make a one-off payment for their mobile, broadband and fixed-line services.

The Vodafone broadband service offers a speed of up to eight megabits. The Vodafone 18-month contract offers landline calls to standard UK landlines for up to one hour per call as well as 25 per cent off of calls to mobiles.

Vodafone has joined forces with BT, which will provide the fixed-line network for the mobile operator’s retail broadband service.

Analysts said yesterday that they welcomed Vodafone’s new broadband service, although there was still a lot of room for more innovative packaging.

Jonathan Coham, a telecoms analyst at Ovum, said: “Vodafone’s tariff fares relatively well, especially if customers require broadband without usage limits.

“It compares well to BT’s Fusion package, although large discounts make BT cheaper in the first 12-18 months.”

Vodafone shares closed ½p higher yesterday at 134½p.

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