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Sky to sell mobile services following Telefonica agreement

by Mark Tyson on 29 January 2015, 13:50

Tags: O2/Telefonica (NYSE:TEF), Sky, Three (HKG:0013), British Telecom (LON:BT.A)

Quick Link: HEXUS.net/qacog2

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Sky will be selling mobile phone services for the first time starting next year. It has just signed a multi-year agreement with Telefonica UK to get wholesale access to 2G, 3G and 4G services. For prospective customers Sky brings to the table its "market-leading capabilities in customer service and innovation". Earlier this morning investors were unsure whether Sky would partner with Telefonica or Vodafone.

Becoming a MVNO will help Sky compete better with the likes of BT and Virgin to offer more complete telecoms and entertainment packages to customers as a so-called 'quad-player'. Sky says that in the seven years that it has been in the home broadband market it has climbed to the number two spot in the industry. Furthermore with its Sky Go mobile TV service it has a total of 5.7 million registered users who can enjoy a choice of 70 channels on demand.

Telefonica already supports the UK's number one MVNO, Tesco Mobile, and its O2-brand promises to develop its 4G network capability to extend to 98 per cent UK coverage by 2017. Hopefully that will be accompanied by more generous data allowances, especially if customers are supposed to 'enjoy' services like Sky Go.

Sky rival BT recently entered into negotiations to purchase network operation EE, for £12.5 billion, to become a 'quad-player'.

Meanwhile Telefonica UK is in exclusive talks with the owner of Three UK to sell and potentially create a new market leading mobile firm in the UK. HSBC recently agreed to provide Three's parent company with £6 billion (US$9 billion) in loans to partly fund a proposed $15 billion acquisition. The O2-Three deal looks like it is going ahead but will be subject to regulatory approval.



HEXUS Forums :: 4 Comments

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I hope this means there will be some good deals for broadband customers
Am I the only one who hates he idea of these quad deals. Can't wait to get out of my ‘tri’ deal on phone/tv/broadband at the moment. I just want a good deal on phone+FTTC without any cruft (like BT sport). I expect those who don't take it all will only end up paying more…
it'll be interesting to see what they come up with, i'm with Tesco as they have much better deals than O2 for a fraction of the cost :-)
I feel the bundles have been bad for customers on the whole.

Quality seems to suffer, existing customers pay more to subsidise the new user offers. You get tied into contracts for everything. And it seems to have created a new “base price” for certain things (i.e. Virgin cable broadband prices seem to have crept to the point where they now appears to include the cost of phone line rental, when there is no phone line……just because they can)

So many people I know are now on Virgin or Sky and all of them get sub-standard connections.