Tesco Telecoms has announced a new five-year deal with Cable and Wireless as its wholesale broadband network provider, enabling Tesco to bundle broadband and home phones for the first time.
Tesco said that despite the broadband market adding one million new connections in 2008, there is significant customer dissatisfaction with service and experience resulting in churn rates of around 20 per cent per year.
The company said it now had an opportunity to develop its services within the broadband market and bring more competitive but simpler offers to make it the number one broadband and home phone choice for Tesco shoppers.
Chief executive officer of Tesco Telecoms and Tesco Mobile Lance Batchelor said: “We’re delighted to be partnering with Cable and Wireless for our broadband and home phone services. We share a commitment to providing excellent customer service and the new network capabilities will allow Tesco Broadband to offer enhanced services for our customers across the UK.”
Cable and Wireless chief executive officer Jim Marsh added: “This is a landmark contract. We’re delighted to be helping one of the most powerful brands in the UK to enhance its broadband offerings and we’re thrilled to be providing the service. We’re absolutely focused on putting our customers’ requirements at the heart of our business and delivering great service – clearly, this is an approach that resonates with Tesco.”
The move has been welcomed by Broadbandchoices.co.uk product director Michael Phillips, who said Tesco’s plans to offer bundled services were “ambitious” but that it would need to differentiate itself.
Said Phillips: “This is an exciting development in Tesco’s plans to become a leading consumer broadband supplier, allowing them for the first time to offer bundled packages of broadband and home phone services.
“Our own research shows that customer service is a key determinant in choosing a phone or broadband provider and Tesco has certainly got off to a strong start with their award winning mobile services. We trust that the Cable and Wireless deal will give them a wholesale broadband partner that can deliver the performance and reliability that broadband users are increasingly demanding, coupled with a consumer-facing brand they can have confidence in.
“Tesco’s ambitious plans for broadband and bundled services bode well for consumers since it should increase competition in the market and put pressure on all ISPs to focus on the importance of customer service. Bundled packages have increased in popularity amongst consumers over the past two years, so it will be interesting to see how Tesco differentiates itself in a bid to win more custom.”