Sky has teamed up with O2’s current owner Telefonica to launch its own mobile network. The multi-year deal will make Sky the third 'quad-play' provider in the UK, rivalling BT and Virgin Media by offering broadband, mobile, TV and landline stakes.
Sky will use Telefonica's mobile network to provide 2G, 3G and 4G services to customers for the first time from 2016. Sky's chief executive, Jeremy Darroch, said the new deal would provide "a range of exciting new services and exploit the opportunities for growth in the fast-changing mobile sector."
The mobile industry has seen a fair few deals during the last two months. BT agreed to buy UK mobile market leader EE for £12.5 billion in December, while Li Ka-shing's Hutchison Whampoa announced that it was hoping to combined O2 and Three in a £10 billion deal just last week.
Sky is well positioned to take advantage of the 'quad-play' bundles that are seen as the "next big UK growth area" for firms in the telecoms and broadcast industry. Two million Sky subscribers already take a phone line, broadband and TV, and the firm is confident that it can "launch new services, at scale."
According to The Guardian, the latest move could also help Ofcom to approve the Three and O2 deal. The regulator may have had concerns about potential rises in broadband prices for customers with only three operators but Sky's arrival in the sector could ease those fears.
broadbandchoices' own industry expert Dominic Baliszewski, said "This is further proof of the UK's inevitable shift towards 'Quad-Play' services (broadband, mobile phone, TV and home phone), but it remains to be seen how quickly customers will adopt these new bundles - at the moment, just understanding the new mobile world order is going to be confusing enough for customers with Sky teaming up with Telefonica, Telefonica selling O2 to Three and BT buying EE outright."
"When the dust settles and packages become available it is important that customers are given clear information to help them understand how these deals are structured, priced and delivered if they are to avoid signing up to something that they don't really need."