Post Office stamps £750m BT mega-deal

The Post Office has signed the largest ever single contract with BT Wholesale for it to supply communications services over the next four years.

The £750m deal lays the foundations for the Post Office to start offering a broadband service later this year and upgrade its existing landline service, HomePhone.

The Post Office will resell BT converged and broadband services as it aims to become a player in voice and broadband comms.

The initial fruits of the tie-up will appear next month when a new price and service package will be launched for HomePhone, a service which already has 400,000 customers.

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The broadband services will be launched in the autumn with BT providing online and telephone customer support.

The Post Office is expanding its range of services to boost revenues due to lost income from a decline in its traditional business.

Other new services include insurance, savings, credit card and personal loans.

Alan Cook, the Post Office's managing director, said it's vital the Post Office earns more revenue from new services in order to have a sustainable future. Expanding its telecoms services will be key to that, he said.

British Telecom was spun off from the Post Office in 1981 following recommendations for the separation of the UK's postal and telecoms services.