Rupert Murdoch will no doubt be rubbing his hands today, after BSkyB, in which he has a 40% share, reached a deal which will give the mogul another half a million customers. It’s costing £180m to acquire the O2 and BE fixed line and broadband brands, and another £20m will also be paid once all of these customers have been switched over to Sky.
The deal will make Sky the second biggest broadband provider in the UK, which considering it already has 4.2 million broadband customers, takes some doing. It will also – and this is crucial – allow Sky to overtake rival Virgin Media in the broadband stakes in one fell swoop.
Sky, Virgin and BT are in something of a battle across their different channels. BT has been buying up sports broadcast rights (as well as whole channels, such as ESPN) to compete with Sky on the television front. Sky is obviously trying to take a bigger bite of the broadband cherry (where BT dominates), and who knows what Virgin will do next, since an American billionaire has just bought its broadband and television division.
Anyway, the Sky deal should be complete by April, if the regulators are happy with what they see. Chief executive Jeremy Darroch, said: ‘Sky has been the UK’s fastest-growing broadband and telephony provided since we entered the market six years ago. The acquisition of Telefonica UK’s consumer broadband and fixed-line telephony business will help us accelerate this growth.’
It looks like BSkyB is trying to consolidate the entire phones/broadband/television/movies continuum into one, big, Murdoch-shaped beast. Time for BT and Virgin to step up the competition…