Sky to launch its own mobile network in 2016 with Telefonica

Despite Three owners Hutchison Whampoa having just sealed a deal to buy Telefonica’s O2 network last week, Sky has announced that it too will be entering into the mobile network game as part of a new multi-year deal with none other than, you guessed it, Telefonica.

“Telefonica UK will give Sky wholesale access to 2G, 3G and 4G services over its popular nationwide network,” the company said in a statement this morning. “Leveraging its market-leading capabilities in customer service and innovation, Sky plans to launch its first mobile telephony services to customers in 2016.”

Sky is already the UK’s fastest growing home communications business, as it managed to become the second home broadband provider with over 5 million customers in just seven years after it first launched. It’s also the UK’s most popular “triple-play” provider, with almost 40% of its customers base currently signed up for all three of its TV, landline and broadband services.

With this new deal with Telefonica, Sky will now be able to compete with both BT and Virgin Media as the UK’s third “quad-play” provider, offering bundled broadband, television, landline and mobile packages to its customers from next year.

Sky had previously been linked to the bid for O2 after reports in the Spanish media claimed that both Sky and TalkTalk were interested in buying the network after it was shunned by BT before Christmas in favour of EE. However, it was beaten to the punch by Hutchison Whampoa, the owners of Three, who is currently thought to be paying £10 billion for O2. While the specifics of Sky’s potential mobile network have yet to be disclosed, it’s highly likely that Sky will be running a virtual network off O2, much like how Virgin Media is currently piggy-backing off EE.

This leaves Vodafone, the only other major mobile phone network now left in the running, looking a little small compared to its newly merged rivals, but it also casts into doubt the future of its heavily-promoted Sky Sports Mobile TV packages on its Red 4G plans.

“As the UK’s leading brand for home entertainment and communications, Sky has a proven ability to launch new services, at scale,” said Jeremy Darroch, Sky’s Group Chief Executive. “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 Telefonica 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.”

“We’re pleased to welcome Sky to our roster of innovative, successful partnerships, through which we help partners grow their offer to customers,” said Ronan Dunne, Chief Executive of Telefonica UK. “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.”