Sky And Vodafone Discuss Possible Alliance To Combat BT – Report

Vodafone and Sky have reportedly held “high level talks” to discuss a possible alliance against BT’s growing power in the broadband market and imminent entry into mobile phone services.

According to The Sunday Times, the two companies have explored the possibility of deals for Sky Sports and Sky Movies, Vodafone already offer Sky Sports Mobile TV to its 4G customers, as well as the creation of a fibre network, but sources told the newspaper the latter was unlikely given that the bill could run into billions of pounds. Vodafone and Sky have declined to comment to TechWeekEurope.

BT has purchased around £2 billion worth of sports television rights, including the Premier League and UEFA Champions League football competitions, to prevent its broadband customers from being tempted away by Sky’s own Internet service, which is bundled with its satellite television offerings.

Sky Vodafone union

The investment appears to already be paying off, with BT adding 195,000 new and existing users to its fibre customer base in the second quarter of 2013. BT Sport is free to any BT broadband customer and more than two million have signed up for the channels.

The former state monopoly’s spending spree has impacted Sky’s share price and investors are concerned that if its rights portfolio is eroded any further, it will struggle to justify the price it charges for its sports packages.

BT has signed a multi-year Mobile Virtual Network Operator (MVNO) agreement with EE and could bundle mobile phone contracts with broadband, phone and TV services as part of ‘quad-play’ packages.

Vodafone fears its lack of a fixed broadband network could hold it back in a quad-play environment, especially since such bundles are popular in the rest of Europe. The British operator has started building fibre networks in Italy and Spain, and has also agreed a £6.6 billion deal for Kabel Deutschland in Germany.

The company could reach a wholesale agreement with BT to operate fibre services through the open access Openreach network, but the lack of strict regulation means that Vodafone could gain very little by offering Internet services in this manner. TalkTalk in particular has called for tighter regulation of the fibre market, claiming it is not as competitive as copper broadband.

What do you know about the history of BT? Take our quiz!

Steve McCaskill

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

Recent Posts

Craig Wright Sentenced For Contempt Of Court

Suspended prison sentence for Craig Wright for “flagrant breach” of court order, after his false…

3 days ago

El Salvador To Sell Or Discontinue Bitcoin Wallet, After IMF Deal

Cash-strapped south American country agrees to sell or discontinue its national Bitcoin wallet after signing…

3 days ago

UK’s ICO Labels Google ‘Irresponsible’ For Tracking Change

Google's change will allow advertisers to track customers' digital “fingerprints”, but UK data protection watchdog…

3 days ago

EU Publishes iOS Interoperability Plans

European Commission publishes preliminary instructions to Apple on how to open up iOS to rivals,…

3 days ago

Momeni Convicted In Bob Lee Murder

San Francisco jury finds Nima Momeni guilty of second-degree murder of Cash App founder Bob…

3 days ago