Sky moves into mobile with O2 UK


Telefónica UK will give Sky wholesale access to 2G, 3G and 4G services

Sky is set to add a range of mobile voice and data services to its customer offering for the first time following the agreement of a new wholesale partnership with Telefónica UK. The deal has come about as Sky rival BT has committed to a £12.5 billion takeover of the largest UK mobile network, EE.

Late last week Hutchison Whampoa, the Japanese parent company of UK telecom operator Three UK, announced that it is set to buy O2 UK for £10.25 billion, pending regulatory approval. The deal with Sky will significantly boost the appeal of O2 UK for Hutchison Whampoa and may aid approval for the partnership.

Under the terms of the multi-year deal, Telefónica UK will give Sky wholesale access to 2G, 3G and 4G services over its popular nationwide network. Using its capabilities in customer service and innovation, Sky plans to launch its first mobile telephony services to customers in 2016.

Sky’s move into the mobile sector builds on its success as the UK’s fastest-growing home communications business. Just seven years after launch, Sky has grown organically to number two in the home broadband market attracting more than five million customers. Sky has also established itself as the UK’s most popular triple-play provider with almost 40% of its customer base now taking all three of TV, telephony and broadband.

In addition, Sky has developed Europe’s top mobile TV service in Sky Go. With 5.7 million registered users, Sky Go meets customers’ growing demand to watch content across multiple devices in and out of the home, offering a choice of up 70 live channels and a wide range of content On Demand.

Telefónica UK has an established track record in successful wholesale partnerships, supporting some of the UK’s leading mobile virtual network operators (MVNOs) including the number one player Tesco Mobile. Telefónica UK’s strong network credentials are underpinned by a unique commitment to 98% 4G coverage by 2017.

Jeremy Darroch, group chief executive, Sky said: “As the UK’s leading brand for home entertainment and communications, Sky has a proven ability to launch new services, at scale. We know our 11.5 million customers trust Sky to offer them the best quality and choice and have an appetite to take more from us. Through our partnership with Telefónica 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.”

Ronan Dunne, chief executive of Telefónica UK, said: “We’re pleased to welcome Sky to our roster of innovative, successful partnerships, through which we help partners grow their offer to customers. Sky understands the importance of a strong network and excellent customer experience and has made us a trusted partner to help deliver brilliant services. This will widen consumer choice still further and demonstrates the lively competitiveness of the UK market. We’re looking forward to working with Sky.”

The combined companies of O2 UK and Three will create the largest mobile operator in the UK with over 31 million subscribers, taking around 41% of the market and also controlling the broadest range of mobile spectrum out of the mobile operators in the UK.


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