Topic: The Grapevine

Rumours are that Phones4U is planning to to sell third-party broadband packages alongside mobile phones in its stores.

Since a deal with Pipex last August it has been selling their services, but sources say that they are looking to Orange and Vodafone for more broadband deals.

The Post Office is denying rumours in The Times that it is to launch a broadband service.

The paper said yesterday that plans were for the PO to offer a bundled broadband product with it's fixed line services, but according to a Post Office spokesman they had no definite plans to do so.

Rumours have it that Orange will follow The Carphone Warehouse into the 'free' broadband market next week when it's merger with Wanadoo is made official.

Carphone Warehouse introduced its 'free' broadband service back in April for customers who also take Talk Talk's fixed line telephone services. Wanadoo's 'free' broadband service will allegedly be offered to the it's two million broadband and dial up customers if they also sign up for an Orange mobile phone account.

The details are sketchy but it is possible that the deal may include a fixed line with free calls to Orange customers, but the downside is that any such service would incur a lengthy contract, a figure of over 18 moths is being banded around the industry.

Rumours are that mobile operator O2 are considering a move for Bulldog or Tiscali.

O2 is now owned by Spain' s Telefonica SA and is looking to move into the UK broadband market and according to reports either Bulldog or Tiscali's UK operations would fit their requirements.

It is thought that any examination of possible targets is at a "preliminary stage", but C&W are thought to prefer an alliance with the mobile outfit, although it has said that it may sell Bulldog is the price was right.

If reports in the Sunday Telegraph are correct Richard Branson's Virgin group is planning to merge with cable telco NTL, but according to other industry sources NTL is going to buy Virgin.

The paper claims a merger is on the cards to merge the two companies into a telco of  2.5 million broadband Internet customers, 4.3 million fixed-line telephone accounts and more than 5 million mobile customers. Under the deal NTL will effectively acquire Virgin Mobile, but the company's name will be replaced by the Virgin brand and Branson will be the largest shareholder.

But.....Other claims are that NTL will buy Richard Branson's Virgin Mobile Holdings Plc for about £835m.

Whatever the outcome it seems that a coming together of the two companies is very likely, as it seems that both are concerned with BSkyB's entry into the telco/broadband market last month.

Reports in The Sunday Times have rumoured that mobile retailer Carphone Warehouse will start installing equipment in BT's exchanges and move into the LLU market.

The retailer already operates a broadband service and is thought to have around 70,000 customers, but it like most ISP's, resells products from BT wholesale. Being a potential large player in the broadband market installing it's own equipment will allow it to operate with greater margins although the initial investment is substantial.

Satellite broadcaster BSkyB is understood to be planning to use up to £1bn to buy its way into the broadband and telephone market in a direct challenge to BT.

The broadcaster announced it was  issuing a corporate bond on Tuesday and there have been no shortage of speculation of how it will spend the money it raises. It is understood to be considering buying one of the fast-growing broadband service providers such as Pipex or Easynet, but also to be looking to invest a significant amount installing its own equipment in local telephone exchanges, with estimates of the cost ranging from £100m and £200m.

This would put BSkyB in a good position to offer video on demand (VOD) services to it's customers, similar to HomeChoice who maybe another takeover target. This will not be a culture shock as Sky are already involved in offering small-scale joint VOD service with Homechoice in London and Kingston Communications in Hull.

A spokesman for BSyB was giving nothing away, stating "If Sky were to go ahead with a corporate bond issue, the proceeds would be used for general corporate purposes.", but didn't dismiss the rumours.

NTL today are set to announce that it is upgrading some of their customers to 10Mbps making the cable ISP the UK's fastest consumer internet service.

The first to be upgraded to the new speeds are those who already receive their current fastest connection of 3Mbps with the remainder of it's 1.9 million customer base updated afterwards.

We understand that there willbe no price increase for the increased speed, instead customers will pay different rates depending on how much is downloaded, rather like buying extra data transfer on PAYG ADSL accounts. We understand that the data allowance will be increased from 30GB to 75GB a month.

Further/confirmed details are expected later today.

Back at the start of May we reported that Telco's NTL and Telewest were planning to merge.

According to  report in the The Independent on Sunday it is only weeks away, the end of July in predicts. The result of the £6.8bn merger would create a media group offering TV, phone and broadband which would seriously trouble the dominant satellite provider BSkyB.

BT is planning the commercial launch of 8Mbps ADSL nationwide by November, although rumours are that it might slip back to December.

The trials began in April, as we previously reported, in parts of London and Scotland and on Monday a BT spokeswoman confirmed that this trial is being expanded to cover more local exchanges in these areas. The extra trials will run until the end of August, with a full rollout planned for November, although industry insiders say this means that the November launch will slip but a BT spokesperson said that  "We're still on track for a November launch,".

Upload speeds are also in line for an increase, with figures of 450Kbps for residential customers and 800Kbps for business users being mentioned. Before everyone jumps for joy it has to be remembered that these speeds will probably only be available to users who live close to exchanges.