Sky set to add mobile to platform beginning in 2016
U.K.-based satellite television provider Sky said it plans to add mobile services to its portfolio through a mobile virtual network operator agreement with Telefónica UK, which offers wireless services under the O2 brand.
The multiyear deal calls for Telefónica UK to provide Sky with wholesale access to the carrier’s network, including its latest LTE-based services, with plans for the Sky service to launch next year.
Sky currently provides television, broadband and telephone services, claiming to be the U.K.’s most popular triple-play provider with almost 40% of its customer base signed up for all three offerings. The mobile component would allow Sky to be a quad-play provider, and bolster its Sky Go platform that allows customers to access content across multiple devices.
The U.K. mobile market, which is currently dominated by four mobile operators in EE, O2, Vodafone and Three, has seen considerable merger and acquisition activity over the past several months as operators vie to better position themselves in a highly competitive market.
Telecom operator BT was reportedly looking to acquire O2 from Telefónica, before putting in a $19.6 billion offer for rival EE, which is a joint venture between Deutsche Telekom and Orange. Three, which is owned by Hong Kong-based Hutchison Whampoa, last year closed on a $1.15 billion acquisition of Telefónica’s operations in Ireland. Reports also indicated that Vodafone was looking at a potential acquisition of quad-play provider TalkTalk.
“With a potential tie-up between EE and BT in the works, this move further evolves the U.K. telecoms market into one of a limited number of converged ‘big hitters’ with Vodafone and TalkTalk left with underdeveloped service portfolios: Vodafone has indicated unrealized aspirations in the fixed consumer market in the U.K. and TalkTalk has successfully sold mobile to only 9% of its customer base to-date,” noted Martin Scott, head of Analysys Mason’s consumer services research practice, in a research note. “Sky has previously proved its ability and willingness to disrupt the telecoms market (notably its low-price, high-speed broadband services); quad-play, and converged fixed-mobile services, could be Sky’s next logical move.”
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