Tesco to look at offering broadband in the UK: report
Key Points
- Tesco Mobile is in early talks to relaunch UK broadband over Virgin Media O2 and Nexfibre fibre networks.
- Tesco exited broadband around 11 years ago, selling roughly 75,000 customers to TalkTalk.
- Tesco Mobile has more than 5.8 million customers, up from 4.4 million in 2015, per Enders Analysis.
- A relaunch could tie broadband to Clubcard rewards to boost customer loyalty.
- Tesco Mobile says it has no current plans to enter the broadband market.
Tesco Mobile is weighing a return to the home broadband market, a step that would sharpen competition across an already crowded UK telecoms sector.
The Financial Times reports that Britain’s largest mobile virtual network operator, which serves more than 5.8 million customers, has held preliminary discussions about selling broadband over the fibre networks run by Virgin Media O2 and Nexfibre.
The operator is jointly owned by the FTSE 100 supermarket chain and VMO2. A broadband push would allow it to cross-sell connectivity to its existing mobile subscribers, a strategy aimed at deepening customer loyalty and building on the popularity of the group’s Clubcard scheme.
Tesco Mobile customers can already accumulate Clubcard points, which can be redeemed for discounts in Tesco stores and with partner retailers.
According to the people familiar with the matter, a comparable rewards structure could be extended to broadband subscribers as an incentive to sign up.
Such a launch would mark Tesco’s first foray back into broadband in more than a decade. The supermarket exited the market roughly 11 years ago when it offloaded its broadband arm, then numbering around 75,000 customers, to TalkTalk.
In the years since, the company has concentrated on mobile, where its subscriber base has expanded from 4.4 million in 2015 to 5.8 million today. The operator has built a reputation for keen pricing and well-regarded customer service.
Any Tesco broadband product would likely sit towards the budget end of the market, the Financial Times reports, though no firm decision had been taken on whether to proceed.
