Tesco aims to be the new BT
Tesco unveiled a new plan yesterday to bundle home phone packages and broadband deals in order to compete with the major providers of broadband such as Carphone Warehouse, BT, and Virgin Media.
The retailer announced that it will be able to offer the new package services for the next five years after signing a deal with Cable & Wireless.
Tesco announced the new plans after a two day seminar was conducted with analysts in order to fulfil Tesco?s goal of becoming one of the top telecoms service providers in the UK.
It estimates that it will need to continue to make around ?200m in profits and ?2b in sales annually past its normal medium term. If it achieved this goal the company would gain just under a tenth of the telecoms market in the UK which is valued in total at ?22b per year.
Chief executive of Tesco Telecoms, Lance Batchelor, stated that the combined home phone and broadband bundle deals is the core of the plans for expansion. Batchelor continued to say that this would propel Tesco into the same arena of the major providers in the UK such as Talk Talk and BT.
Consumer experts believe that the new move by Tesco is significant because bundle packages by the leading providers currently makes up a large percent of the market and will cause such providers to lower their prices in order to compete.
Batchelor also said that Tesco?s expenditures as a result of the move will be minimized due to the new partnership with Cable & Wireless.
