O2 seeks 1 million customers with launch of home broadband

Mobile phone company O2 will finally launch its residential broadband service this month as it tries to attract the first wave of customers who signed up for "free" broadband services with rivals such as TalkTalk and Orange and are coming to the end of their contracts.

Owned by Spain's Telefónica, O2 believes many consumers are dissatisfied with the customer service they have received with their "free" broadband access and want to switch. Its service, launching on October 15, starts at £7.50 a month for O2 mobile customers and comes with free 24-hour technical support, provided by the firm's call centre in Glasgow, and no set monthly usage limit.

It expects 1 million broadband users by 2010, a modest target given that O2 is Britain's largest mobile phone company with 17.8 million customers. The company hopes it will prevent mobile customers defecting to bundled broadband and mobile offerings from competitors such as Vodafone.

Matthew Key, O2's UK chief, said there were no plans to follow providers such as Orange, Tiscali and BT and include internet TV with broadband. Orange's TV service is already available in France and will launch in Britain before Christmas.

The launch of O2's broadband service has been delayed several times. The company bought Be Broadband for £50m last year with talk that it would have a broadband service ready for January. The Be Broadband network, however, was focused on urban areas, prompting intense debate within O2 about whether to spend money extending it nationwide.

The company, however, shied away from further big investment. As a result the service will cover only half the British population at launch. O2 is also not offering residential telephony services, so customers will have to pay a rival phone company for their line rental and calls.

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