Vodafone is to launch a retail fibre broadband offer in the UK next year as it seeks to mitigate the impact of rivals and progress towards becoming a fully converged operator.

The telco announced the news at its half-year financial results in London on Tuesday.

Details of the residential broadband service launch, penciled in for the spring of 2015, were skant.

CEO Vittorio Colao admitted to journalists that the move was somewhat defensive but complementary to its overall strategy of convergence, which has seen it acquire fixed assets in Greece and Spain this year.

The UK service will leverage the infrastructure acquired with the acquisition of Cable & Wireless Worldwide in 2012.

Colao said Vodafone did not have to buy to boost the footprint of CWW, saying they were designing the roll out based on what they have currently, but did not rule it out entirely.

Asked whether he would bid for content rights, he said: “We have good relationships with content providers.”

Vodafone UK’s mobile arm has existing partnerships with Sky, Spotify and Netflix.

The announcement was made as recent M&A activity helped Vodafone Group to increase revenues by 8.9 percent year-on-year in the six months to September to £20.7 billion (€26.4 billion).

Sales of mobile in-bundle and fixed-line services were the main driver, thanks to the boost provided by acquisitions such as Hellas Online in Greece and Ono in Spain.

Vodafone is currently investigating alleged tax fraud at Ono and Colao said he had “a good understanding” of what had happened, who had done it and when.

He reiterated the fact that the sums in question were not materially significant and said he did not believe it was the tip of an iceberg.

The jump in reported revenues helped to push EBITDA up 5.5 percent to €5.9 billion (€7.5 billion) despite higher opex.

However, on a like-for-like basis, revenues were down three percent, while operating profit was down by a third and EBITDA margin fell by almost one percent.

Organic revenues in Europe fell over seven percent to £13.9 billion (€17.7 billion) but the operator said the decline continued a trend of falling quarter-on-quarter.

Vodafone now has 10.5 million fixed broadband customers in Europe and fixed revenues now account for 23.7 percent of total service revenue compared to 18.1 percent this time last year.

Meanwhile, 4G accounts for 21 percent of data traffic in Europe, up from 16 percent a year ago. The operator said mobile video traffic had increased by 88 percent.

Colao commented: “There is growing evidence of stabilisation in a number of our European markets, supported by improvements in our commercial execution and very strong demand for data. Customers are showing an increasing propensity to trade up to bigger data allowances as a result of the 4G experience.”

Capex rose by over two-thirds as network investment Project Spring continued. Vodafone said mobile network deployment was now 40 percent complete and European 4G coverage was up to 59 percent from 32 percent this time last year.

Colao commented: “We are not yet half way through our investment programme, and there is still much more we will do to build a differentiated service for customers and improve perception. Today in Europe, only six percent of our customers are using 4G. In the next 18 months, we will reach 90 percent 4G coverage in Europe.”

Like-for-like sales in Africa, the Middle East and Asia-Pac were up 5.7 percent to £6.5 billion (€8.3 billion) as voice and data usage increased nine percent and 110 percent respectively.

Mobile money service M-Pesa reported 16 percent user growth and now serves 18.5 million active customers.

Meanwhile, revenue at Vodafone Global Enterprise rose one percent in the three months to September thanks to contract wins at British Gas, Aviva and Robert Bosch. M2M services reported revenue growth was 24 percent.

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