BSkyB buys Telefónica broadband business

sky-broadband-routerBSkyB has reached agreement with Telefónica UK to acquire its O2 and BE consumer broadband and fixed-line telephony business. In doing so Sky will become the UK’s second largest broadband provider after BT.

On completion the half million subscribers will be transferred to Sky’s home communications business.

Jeremy Darroch, Sky’s chief executive, said: “Sky has been the UK’s fastest-growing broadband and telephony provider since we entered the market six years ago. From a standing start in 2006, we have added more than 4.2 million broadband customers. The acquisition of Telefónica UK’s consumer broadband and fixed-line telephony business will help us accelerate this growth.

As of December 31, 2012, Sky had 4.2 million broadband customers and 4 million telephony customers. BT currently has 6,569,000 broadband subscribers to Virgin Media’s 4,465,000.

The deal will need to be approved by regulators, who are expected to give a decision by April.

Sky will pay £180 million to Telefónica UK for the consumer broadband, home phone and line rental customers served by the O2 and BE brands. A further £20 million pay be payable on completion.

Post completion, O2 and BE customers will be migrated onto Sky’s fully unbundled network, supported by a nationwide all-fibre core, which reaches 84% of all UK homes.