Sky buying O2 and BE broadband: What does it mean?

broadbandchoices.co.uk looks at how Sky splashing the cash will affect O2 and BE broadband customers and the UK broadband market...

Late last week, Sky, best known for its satellite TV service but also a broadband provider, announced it was buying the broadband and home phone services of rival providers O2 and BE Broadband.

The sale will see O2 and BE's 500,000-plus broadband and home phone customers switched to Sky's broadband network once the sale is completed, with Sky becoming the UK's second-biggest broadband provider behind BT in the process.

But what will Sky's acquisition mean for O2 and BE broadband customers? Will they be able to end their contracts early? Will they be able to get fibre? And how will the loss of two big name broadband providers affect the UK broadband market as a whole?

Sky buying O2 and BE broadband: The good

"This is a huge development for the UK broadband market," says Dominic Baliszewski, telecoms expert at broadbandchoices.co.uk. "This acquisition provides a chance for Sky to scale its award-winning triple-play offering to the O2 and BE customer base."

Sky (www.Sky.com) says it will be in contact with O2 and BE broadband customers about what will be available to them before their service is switched later this year, which could mean they will be offered the opportunity to bundle Sky TV with their broadband.

However, with O2 consistently performing well in the broadbandchoices Customer Satisfaction Awards over the last few years, Baliszewski says: "Sky will need to ensure it meets the high expectations its new customers will demand".

While Tiscali customers endured a series of problems after their broadband service was bought by TalkTalk in 2009, Mark Jackson, editor-in-chief of broadband news website ISPreview, doesn't believe O2 and BE broadband customers need fear a similar fate.

"Tiscali was a generally poorly managed and supported ISP [internet service provider] that had suffered from years of administrative problems, which ultimately spread to TalkTalk.

"By contrast O2 and BE have a significantly stronger reputation for support and Sky aren't terrible in that department either, although they could still be better."

Jackson adds that another potential positive for O2 and BE customers is that, once the switch is complete, they will have the option to upgrade to superfast fibre broadband if they live within the Sky Fibre network area - something which neither O2 and BE offer.

Sky buying O2 and BE broadband: The bad

The news has met with negative reaction from some O2 and BE broadband customers, suspicious their service will get worse or taking issue with Rupert Murdoch's News Corporation owning a controlling stake in Sky.

While the latter reason is beyond our remit, the former, while understandable, is not based in fact as, so far, little is known about what O2 and BE broadband customers will be offered by Sky.

However, Jackson believes the move to Sky could see O2 and BE broadband packages lose more advanced features, such as faster upload speeds and static IP addresses, that Sky don't offer "and thus may not be carried over with Sky's migration".

He says it is to be expected this will lead some to see the sale "as a bad thing," but points out this change in contract terms would enable BE and O2 broadband customers to leave their contracts early without penalty in communication regulator Ofcom's view, although this can't be confirmed until more details are available.

Sky buying O2 and BE broadband: The rest

With Virgin Media under new ownership and BT gaining further exclusive rights to show live Premier League football through buying ESPN UK, Dominic Baliszewski says "it's exciting times for UK broadband users".

However, will the disappearance of O2 and BE from the pool of UK broadband providers and Sky increasing its share of the market see broadband in this country become less competitive and thus more expensive?

Not according to Mark Jackson: "In reality there are actually hundreds of ISPs in the UK market for home broadband, provided you're willing to hunt for them, and in that respect O2's loss is unlikely to be too detrimental."

He adds that this means, even if one of Sky's rivals were to follow its lead and buy, say, EE, which has been rumoured to be the subject of a takeover, there will always be more choice for those willing to look beyond the major broadband providers.

"Not everybody wants a cheap and hopefully cheerful service," says Jackson. "Others will gladly pay a premium for more advanced features and a better quality of service - the big boys simply can't cater for that."

Are you an O2 or BE broadband customer? What do you think about your broadband being switched to Sky? Let us know in the comments section below.

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