BSkyB To Bid For Everything Everywhere Spectrum?

BSkyB is weighing up an ambitious bid for the 1800MHz spectrum being put up for auction by Everything Everywhere, according to a report in The Sunday Times.

The satellite broadcaster has reportedly met with Morgan Stanley, which was appointed by Everything Everywhere in April to advise it on the deal, but faces competition from the other mobile operators for the valuable spectrum.

Skyward Move

Such a move would demonstrate Sky’s desire to strengthen its satellite television business in the face of competition from rivals such as BT and Virgin Media as well as Internet services such as Netflix and Lovefilm.

By adding a mobile network, Sky would become a quad-play provider, offering television, telephone, Internet and mobile phone services in a similar fashion to Virgin Media. The company would also be able to extract more money from its existing subscriber base.

Everything Everywhere is required to sell some of its 1800MHz bandwidth as a condition of the European Union’s approval of the merger of Orange and T-Mobile which created the company. It is expected that the auction could raise as much as £400 million, a figure certainly within Sky’s reach.

Earlier this month, BSkyB reported record profits of £689 million and revenues of £5.2 billion in the first quarter of this year. However the associated costs with building its own network would not please investors who expect improved dividends.

The other mobile operators, O2, Three and Vodafone, are also expected to bid in the rare auction at a time when their networks are coming under increasing strain as demand for mobile data increases.

Everything Everywhere has announced plans to launch a 4G serviceon its existing network ahead of the auction of 4G spectrum later this year, a move which has sparked outrage from its rivals.

Update: Sky has told TechWeekEurope that it currently has no plans to enter the UK mobile market.

“As you might expect we regularly meet with a wide range of companies to explore and understand potential opportunities,” said a Sky spokesperson. “While we continue to extend our leadership in mobile content, we currently have no plans to offer mobile access beyond our existing public Wi-Fi network.”

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