Tesco Mobile is making a radical comeback into Britain’s broadband market. The mobile operator wants to expand its services beyond mobile packages in a highly competitive telecoms sector. This strategic move could enable the company to pitch broadband deals to its massive base of 5.8 million mobile customers. It would also offer a very significant new competitor in an overcrowded market.

Early Plans for Fibre Broadband

Sources from the Financial Times have said that Tesco Mobile has also started studying the possibility of offering fibre broadband. The company is looking into using networks run by Nexfibre and Virgin Media O2, which jointly owns Tesco Mobile alongside supermarket giant Tesco.

The main goal of this expansion is to see if a broadband bundle can complement its current mobile plans. The company has several services that can help build a loyal customer base.

Tesco Mobile already offers the popular Clubcard rewards scheme to socialise customers. Industry experts believe it would be very easy for the company to expand their successful model to broadband packages. Different offers could include special discounts on purchases, or additional Clubcard points for joining. 

While these talks are underway, Tesco Mobile states that it routinely speaks with potential partners but currently has no official plans to launch a broadband product.

A Bold Move in a Crowded Market

This potential launch marks a major shift for Tesco. The company left the broadband market 11 years ago when it sold its small service of 75,000 customers to TalkTalk. Tesco has since solely concentrated on providing mobile services. It has 5.8 million mobile users today versus 4.4 million in 2015.

The UK telecom operators have raised more than 31 billion pounds of investment for deployment of fibre across the country, giving broadband providers the opportunity to enter into an intense environment.

Many smaller, alternative network providers are currently facing challenges of low customer growth and high building costs. But analysts are hopeful that Tesco will be in a stronger position. Its well-known brand and enormous mobile customer base give it a unique advantage to disrupt the UK telecom industry once again.