Vodafone is entering Britain's crowded fixed-line broadband Internet market after striking a deal with BT Group, an Associated Press report said.
The report said the agreement meant that Vodafone, the world's biggest mobile phone operator by sales, would be able to offer bundled mobile phone and broadband service packages later this year.
The move was widely anticipated after the company said in May that it planned to expand beyond mobile operations, the report said.
"Today's announcement is a strategically important step in the evolution of Vodafone's business in the UK," Nick Read, Vodafone's CEO, was quoted as saying.
Vodafone until recently prided itself on being a "pure-play" mobile operation, without the costs of a declining fixed-line business. However, it changed tack as fixed and mobile businesses moved to cheaper, combined services, the report said.
The deal with BT sets Vodafone apart from most other new entrants to the broadband arena because it involves renting capacity from BT's wholesale wing, according to the report.
The deal would also be a blow to struggling fixed-line firm Cable & Wireless, which had hoped to carry Vodafone's traffic on its Bulldog network, the report further said.