Vodafone plans UK broadband launch on Jan. 8

LONDON, Nov 10 (Reuters) Mobile phone group Vodafone Group Plc will offer fixed-line broadband in the UK from Jan. 8, as the cell phone giant targets new revenue streams and looks to boost customer loyalty at its main mobile business.

The UK-based company is aiming to get up to 10 percent of its annual revenues over the next three to four years from its so called ''Mobile Zone'' businesses, which include converged fixed-mobile Internet services.

Vodafone's broadband offering will be the latest in Britain's crowded broadband market, which has become increasingly cut-throat as new entrants seek to lure customers with distinctive pricing strategies.

Vodafone said on Friday the 25 pounds (.67) a month price for its 'Vodafone at Home' offer would cover monthly line rental, unlimited broadband, free landline calls anytime to another UK landline, a 25 percent discount on calls to mobiles and a modem.

Vodafone will also provide a free-to-call technical help line for the up to 8-megabits per second service, which will be available to its mobile customers on 18-month contracts.

''Vodafone at Home meets the growing communication needs of customers, with bills for mobile and fixed communication services coming from one company,'' Vodafone said in a statement.

For years, Vodafone had prided itself on being a ''pure play'' mobile operator, unencumbered by a declining fixed-line business.

But as intense competition puts pressure on mobile growth and margins, the firm has had to change tack.

The group last May unveiled a new strategy to develop products and services to meet its customers' total communication needs. Its UK move follows similar launches in markets such as Germany and Italy.

Mobile retailer Carphone Warehouse and pay-TV firm BSkyB have announced so-called ''free broadband'' offers for customers of their fixed-line and TV services respectively.

Vodafone's rival, France Telecom-owned Orange, also offers free broadband for mobile customers on 30-pounds-a-month, 18-month mobile contracts. Another rival, Telefonica-owned O2, which acquired UK broadband provider Be last June, is planning to launch its own service next year.

Analysts said Vodafone's offer seemed attractive compared with the consumer offering of BT Group Plc, whose wholesale service it is using for the service. The group announced a wholesale broadband deal with BT last September.

''It may not be the cheapest in the market. But the combination of the Vodafone quality brand and discounts associated with calls to mobiles will make it appealing. It's good to see them adding another string to the bow,'' said Dresdner Kleinwort analyst Robert Grindle.

Grindle said Vodafone's broadband foray was aimed at boosting customer ''stickiness'' in addition to boosting revenues, but warned the company needed to deliver on implementation, lest it become a public relations disaster that could harm the brand.

Earlier this year, Carphone Warehouse found itself overwhelmed by the huge demand for its broadband offering and had to face a barrage of customer complaints.

Vodafone is offering to connect customers within 10 working days or getting an order. Typically, customers have to wait anywhere between 3-5 weeks for a broadband connection.

REUTERS SBA PM1751