British DTH giant Sky has struck an MVNO agreement with Telefonica which will give it wholesale access to UK operator O2’s 2G, 3G and 4G services.
The alliance will allow Sky to offer quad-play to rival BT – itself in final negotiations to buy…
British DTH giant Sky has struck an MVNO agreement with Telefonica which will give it wholesale access to UK operator O2’s 2G, 3G and 4G services.
The alliance will allow Sky to offer quad-play to rival BT – itself in final negotiations to buy mobile operator EE – but the satellite broadcaster has not committed to bundling its services, a person familiar with the matter told TelecomFinance.
Sky is yet to be convinced that demand from consumers is driving the industry’s move to convergence, and instead suspects that it is being pushed by telecoms providers.
It sees its MVNO, set to launch sometime in 2016, as a low-risk way to test the market’s appetite for Sky-branded mobile products.
Sky is now the second-largest broadband provider in the UK after incumbent BT, and describes itself as the country’s most popular triple-play provider, with almost 40% of its subscribers taking pay-TV, telephony and broadband.
The tie-up comes less than a week after Telefonica entered exclusive talks to sell O2 to Hutchison Whampoa and its local mobile unit Three. But discussions with Sky have been going on for a while and the partnership is separate to the potential takeover.
Nevertheless, the agreement is likely to be looked upon favourably by the European Commission, which will review Hutchison’s £10.25bn (US$15.4bn) acquisition of O2 providing it manages to finalise terms.
Hutchison plans to merge O2 with Three, which would reduce the number of mobile network operators in the country from four to three.
The EC has already approved four-to-three mobile consolidation in Austria, Ireland and Germany. In all three of those mergers, it required the acquirers to pledge capacity to MVNOs.
Sky’s cable rival Virgin Media already offers mobile through an MVNO, and budget broadband player TalkTalk is planning on launching its own virtual operator next year.
BT looks set to agree final terms to buy EE but, even if this fails, plans to launch an MVNO as it contingency plan, meaning all of the UK’s main broadband and fixed-line players will soon be competing in mobile.
In a statement Jeremy Darroch, Sky’s CEO, said: “As the UK’s leading brand for home entertainment and communications, Sky has a proven ability to launch new services, at scale.”
“Through our partnership with Telefonica UK, we can build on our expertise in content, innovation and service to launch a range of exciting new services and exploit the opportunities for growth in the fast-changing mobile sector.”
