Sky and O2 reach MVNO agreement to allow broadcaster to enter the world of quad-play from next year
Sky is to make its long-awaited entry into the mobile market after agreeing a wholesale deal with Telefonica UK to operate a Mobile Virtual Network Operator (MVNO) on the O2 network.
Under the terms of the deal, Sky will be able to provide 2G, 3G and 4G services to customers, allowing it to offer ‘quad-play’ packages of mobile, landline, broadband and television services to subscribers.
The company claims that 40 percent of its customers have ‘triple play’ packages, but the addition of mobile brings it in line with rivals TalkTalk, Sky and BT, all of whom offer, or have plans to offer, all four services.
Sky is confident that its recent success in entering the home broadband market bodes well for its future in mobile too.
Sky O2 MVNO deal
“As the UK’s leading brand for home entertainment and communications, Sky has a proven ability to launch new services, at scale,” said group chief executive Jeremy Darroch. “Through our partnership with Telefonica 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.”
O2 had attracted the attention of former owner BT, which instead opted to pursue a deal to buy EE for £12.5 billion, but Telefonica is set to sell its UK operations to Three for up to £10.25 billion. If completed, the merger would create the country’s largest mobile operator by customers, making it likely that the deal will attract regulatory attention.
However, by agreeing a partnership with a potential rival like Sky, Telefonica might hope that the EU competition authorities are more likely to give the deal its blessing. O2 already hosts a number of MVNOs, most notably Tesco Mobile, and CEO Ronan Dunne says he is happy to welcome Sky to its stable.
“We’re pleased to welcome Sky to our roster of innovative, successful partnerships, through which we help partners grow their offer to customers,” he said. “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.”
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