More United Kigndom IP Communications Stories

UK's Sky Broadcasting Group plc recently announced that it struck a deal with Telefónica UK in which it will acquire all of the company's O2 (News - Alert) and BE customers on both broadband and land line subscriptions. This deal leads to the further consolidation of the telecommunications market, making Sky take second place among broadband providers in the UK. At this moment, Sky takes home the first-place trophy as the fastest-growing broadband and telephone business in the UK. Its acquisition of Telefónica's customer base galvanizes Sky's position among the leaders in UK's telecommunications industry.

Telefónica UK's more than 500,000 customers will shift over to Sky's services once the deal is finalized. Because of this new expansion, Sky will have the ability to introduce more flexible options to its household communications plans.

This transaction, of course, isn't free. The agreement stipulates that Sky must pay 180 million British pounds (approx. $275 million) for Telefónica UK's broadband, home phone, and line rental customers within both the O2 and BE brands. There's an extra 20 million GBP (approx. $30 million) hanging on the deal, depending on what conditions would be necessary for the smooth migration of Telefónica UK's customers to the new infrastructure. After everything is done, O2 and BE customers will take part in Sky's network, the backbone of which is a fiber-optic core spanning the entire country and reaching more than 80 percent of all homes in the UK.

"Sky has been the UK's fastest-growing broadband and telephony provider since we entered the market six years ago," said Jeremy Darroch, chief executive of Sky. "From a standing start in 2006, we have added more than 4.2 million broadband customers. The acquisition of Telefónica UK's customer broadband and fixed-line telephony business will help us accelerate this growth. We believe that the O2 and BE consumer broadband and telephony business is a great fit, with customers used to high-quality products and strong levels of customer service. We look forward to welcoming these new customers to Sky and giving them access to our wide range of high-quality products, great value, and industry-leading customer service."

Sky's got a pretty thick portfolio, even without the new customers. The company's been seeing a spur in customer demand for its broadband and home telephone services and, as a result, Sky has 4.2 million broadband subscribers and four million telephone customers. Sky has become UK's biggest triple-play (Internet + TV + Phone (News - Alert)) provider, totaling 3.6 million customers. The Telefónica UK acquisition will give Sky the possibility of providing even more subscribers with multiple-subscription packages.