Mobile-phone firm Vodafone will start offering its 16m customers broadband next year, writes Ali Hussain.

It is the latest firm to enter the increasingly crowded broadband market, where Orange and NTL-Virgin already offer deals.

The fixed-line broadband service, which will offer connection speeds of up to eight megabytes per second, will be available from January 8.

The company will charge £25 a month for the “Vodafone at Home” package if you are an existing customer on an 18-month contract. It will include monthly line rental, unlimited broadband, free landline calls any time to another UK landline, and a 25 per cent discount on calls to mobiles. The package includes a broadband modem.

If you cancel your Vodafone mobile contract, however, the cost will go up to £35 a month.

Vodafone’s rival, France Telecom-owned Orange, also offers free broadband for mobile customers on £30 a month, 18-month mobile contracts. It also offers a 10 per cent discount on all Orange calls. But the speed is only two megabytes per second — a quarter of the Vodafone speed.

It has also launched its Orange Unique phone for £50 a month, which uses the internet to make cheap calls when at home. The package includes 600 mobile minutes to any network, unlimited calls to UK landlines and Orange mobiles when you are at home, up to 8Mb wireless broadband, and the ability to send up to 400 texts per month.

The Virgin “free” broadband service is available to its customers on a £20 a month contract.

Another rival, O2, which acquired Be, the UK broadband provider, is planning to launch its own service next year.

Jason Lloyd, head of broadband at Moneysupermarket, a comparison firm, said: “The fact that it’s an 18-month contract and it’s only available to existing Vodafone customers suggests it has been created primarily to retain existing Vodafone customers rather than attract new ones.”

He added: “Our advice is to only consider this product if you are an existing Vodafone customer and you want to save costs on your mobile calls.”

Anthony Ball, director of One Compare, a comparison firm, said: “Vodafone’s offer seems to be a fairly strong proposition, although consumers must watch out for the fine print, which includes a jump in cost by £10 should you cancel your mobile phone contract, a cap on call length to 60 minutes free and the exclusion of 0845 numbers.

“Considering the relative improved value in Orange’s new offering — which combines free calls to not only landlines but other Orange phones, broadband and 600 inclusive standard mobile call minutes for a total of £50 per month — it will remain to be seen whether the customer service proposition will be strong enough to tempt consumers.”

Orange and Vodafone have a 30-day, money-back offer. Chris Williams of Uswitch, a comparison service, said: “This could be a big selling point for those customers that are maybe put off by the recent reports of poor customer service from broadband providers.”

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