Sky is launching a new mobile service in the UK using O2's mobile infrastructure, in a move that will allow it to begin offering 'quad-play' plans.
The broadband, fixed line, phone, and TV provider will add mobile services to its lineup in 2016 thanks to a new multi-year deal with Telefonica for wholesale access to its 2G, 3G, and 4G network. Telefonica operates under the O2 brand in the UK.
Sky's addition of mobile services means it will begin offering 'quad-play' packages - which include fixed line phone, broadband, TV, and mobile services - to its subscribers. The deal comes at a time of upheaval in the country's telecoms sector that looks likely to end with consolidation among the main mobile players.
Telefonica last week confirmed it was in talks with the owner of Three in the UK, Hutchison Whampoa, over the sale of O2 for £10.25bn. If the deal goes ahead, it would make Three the largest mobile network in the country by subscriber numbers.
Late last year, the former state monopoly confirmed it was in talks to buy the EE mobile network. Should the deal go ahead, it would give BT the infrastructure to offer its own quad-play services, allowing it to compete with those offered by its main rival Virgin Media.
Sky says it has five million home broadband subscribers and that 40 percent of its customers have TV, telephone, and broadband bundles. Sky users "have an appetite to take more from us," according to Jeremy Darroch, Sky's group chief executive.
Telefonica has signed two key mobile virtual network operator agreements in the UK over the past two years, including with Tesco in 2013 and late last year with TalkTalk, which bolstered its existing mobile business.
TalkTalk had four million home and business broadband subscribers at the time and claimed nine percent had taken up mobile also. TalkTalk, which also owns its own "in-home 4G spectrum", ultimately wants to build a small cell and fibre-to-the-premises network.
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