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Sky announces plans to enter mobile sector

Tags: O2/Telefonica (NYSE:TEF), Sky

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PRESS RELEASE

Sky is set to add a range of mobile voice and data services to its customer offering for the first time following agreement of a new partnership with Telefónica UK.

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. Leveraging its market-leading 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 2 in the home broadband market attracting more than 5 million customers with its offer of better choice and value. 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 leading 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, whenever and wherever customers want it.

Telefónica UK has an established track record in successful wholesale partnerships, supporting some of the UK's leading MVNOs (mobile virtual network operators) including the number 1 player Tesco Mobile. Telefónica UK's strong network credentials have helped its O2-branded service enjoy industry-leading customer satisfaction and 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."

About Sky

Sky is Europe's leading entertainment company with 20 million customers across five countries: Italy, Germany, Austria, the UK and Ireland. We offer the best and broadest range of content, deliver market-leading customer service and use innovative new technology to give customers a better TV experience, whenever and wherever they choose.

Sky has annual revenues of over £11 billion and is Europe's leading investor in television content with a combined programming budget of over £4.6 billion. The company employs 31,000 people and is listed on the London Stock Exchange (SKY).

For more information visit www.sky.com/corporate.