Vodafone has announced plans to remove line rental charges for new and upgrading fibre optic home broadband customers in the UK.
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The mobile giant launched a fixed-line broadband service in October, years after BT, Sky, TalkTalk and Virgin Media built customer bases in millions of households.
This is because broadband providers are under pressure from government and Ofcom to change advertised pricing so customers see a cost per month that includes line rental, so Vodafone is stealing a march on its rivals.
Joint research, published by the comms regulator and the advertising watchdog earlier in 2016, purported to show that only a quarter of United Kingdom consumers were able to correctly identify the total cost per month of a broadband package after viewing a TV advert.
Vodafone’s move also reflects the fact that broadband is increasingly the primary telecoms service for households.
If you want to double up your speeds to Unlimited Fibre 76 (which is up to 76Mbps), you won’t pay much more at £28 per month all-in (although there is a £49 one-off fibre connection fee for these FTTC packages for new customers). A landline service will be included free, Vodafone said.
The announcement was welcomed by the former broadband minister Ed Vaizey, who said he had “been calling on industry to do this for ages” and that he hoped others would follow suit.
The move, which Vodafone says is a first for the United Kingdom telecoms industry, means that many consumers will pay significantly less than before for their broadband.
“We started our journey into fibre optic home broadband just over a year ago and are delighted to show that we are a truly innovative and customer focused provider”. Now only Virgin Media and Relish, which use both use non-ADSL networks, sell broadband without charging any fee for line rental. The £18-a-month line rental does still apply to Vodafone Unlimited Standard 17 Broadband.
Analyst Paolo Pescatore from CCS Insight said it was a bold move, but that Vodafone now needs to think more about its content provision.
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He said: “It won’t be long before this way of pricing becomes the norm across the whole broadband market – although Vodafone should get a pat on the back for being the first to take the plunge”.
