The news has broken in the past week that BSkyB, the media giant, is set to become the 2nd largest player in the UK broadband market (subscriber numbers considered) after agreeing a deal to purchase Telefonica’s rival business. Estimated at just under £200m with add-ons taken into account, the deal will see BSkyB take their subscriber numbers from 4.2 million, to 4.7 million. This takes them just above Virgin Media into second place, who have 4.5 million.
It is believe that Telefonica, who own O2, wanted out of the broadband business to focus more of the mobile phone offerings that they have around the world. With the rollout of 4G over the past few months, and the continued acceptance the technology is gaining, their time is likely to be taken up already. Especially considering that 4G technology has already seen a rise in various companies shares prices, with Chinese based manufacturer ZTE growing 9% almost overnight at the announcement of 4G in their home country.
Both companies in the deal see it as a win. BSkyB chief exec commented “We believe that the O2 and BE consumer broadband and telephony business is a great fit, with customers used to high-quality products and strong levels of customer service”. Whilst Telefonica UK chief exec Ronan Dunne exclaimed “we believe this agreement is the best way of helping our customers get the highest quality home broadband experience from a leading organisation in the market” as they focus more of their efforts on mobile and 4G.