Dart Folk

Tesco has just entered into a five-year long contract with Cable&Wireless in order to launch its own range of broadband bundles. In the past, it had launched such products in association with Virgin Media Broadband.

The supermarket giant occupies one third of the grocery business in the UK, and is thinking of moving beyond this line of business. According to Tesco telecoms chief Lance Batchelor, the large market of fixed telephone and broadband, which is worth around 8.8 billion pounds a year, has been running at 20 per cent merely. This means that there is a good scope for Tesco to enter the market and make good profits. It will be competing with the large broadband service providers of the industry.

Many expect that this entry will further bring down the broadband prices, as Tesco may be undercutting other companies.

The company intends to use its already existing network of supermarkets in order to promote the products. It would pose a great popularity challenge to other service providers as it has a large circulation base.

Though Tesco is not new to the sector, it does not have tie ups with any major service provider. Thus, it is free to develop its own products and use its retail business to promote its broadband bundles, which are especially meant for homes and individuals.