Sky has announced that they will purchase Telefonica’s UK broadband and phone live services.
Telefonica and Sky have reached a deal to sell all of Telefonica’s O2 and BE broadband/phone service to Sky for £180 ($273 million) upfront and an additional £20 million ($30 million) later on. Sky is already one of the largest broadband providers in the United Kingdom with a 16% market share in 2011, but picking up another few customers never hurts.
By purchasing the broadband and phone services from Telefonica, Sky will add around 500,000 new customers which will give them the #2 spot among UK ISP’s. Most customers will see no change to their actual service and only minimal changes to billing.
According to O2, they decided to sell their services to Sky in order to focus on improving their mobile experience with new 4G services. Unless you choose to upgrade your services to Sky’s fiber optic broadband, you will be able to keep the same O2 router as well.
O2 and BE have struggled in recent years and while they still have over half a million customers combined, selling their broadband and phone services seems like it should benefit Telefonica in the long run. Sky’s Chief Executive Jeremy Darroch said the following about the deal:
Sky has been the UK’s fastest-growing broadband and telephony provider since we entered the market six years ago. From a standing start in 2006, we have added more than 4.2 million broadband customers. The acquisition of Telefónica UK’s consumer broadband and fixed-line telephony business will help us accelerate this growth.
Telefonica made sure to prop up Sky in order to make customers less unhappy about switching their service providers by saying things such as:
Sky offers great value, totally unlimited broadband which includes unlimited fibre services. As we focus on delivering best-in-class mobile connectivity, including next generation (4G) services, we believe this agreement is the best way of helping our customers get the highest quality home broadband experience from a leading organisation in the market.
The deal still needs to go through the appropriate regulators but if it passes without any issues, the sale should be final by April 2013.