Sky buys O2 Broadband

BSkyB the media giant has agreed to acquire O2/Telefonica's O2 broadband service (this also includes the Be broadband service that O2 originally acquired to launch their broadband services). Sky will initially pay Telefonica £180m followed by another £20m following the successful migration of the customer base.

O2/Be have 560,100 broadband customers which added to Sky's 4,235,000 customers gives them 4,795,100 customers and pushes Sky into 2nd place in the UK broadband market following BT Retail with 6,569,000 and putting VirginMedia into 3rd place with 4,465,000.

The acquisition also covers O2's fixed line telephony unit and will increase Sky's consumer offering.

Though there is overlap in terms of infrastructure, O2's network will be migrated on to Sky's existing network - though it's likely there will be some exchanges that O2 have unbundled that Sky haven't - which means Sky's LLU (local loop unbundled) network will grow slightly as they move into those exchanges.

Sky will maintain O2's LLU offering (i.e. wholesale broadband service offered to other operators), but O2's LLU business will be migrated on to Sky's network. This should be a 'good thing' as O2's network reach will increase as they get access to Sky's unbundled exchanges, however some operators are worried that the quality of the underlying network will decrease and thus the customer experience may deteriorate.

The deal still has to get regulatory approval, but assuming there are no objections it should complete by April.

The added cash (which cant hurt as Telefonica/O2 has just spend a chunk on buying 800MHz spectrum in the recent 4G spectrum auctions) will be used to accelerate the rollout of 4G services.

Competition try to tear Canvas

Project Canvas, the joint venture between the BBC, ITV, Channel 4, Five, BT, TalkTalk and Arqiva which will deliver TV channels through a set top box (which is connected to an aerial for receiving DTV and the Internet for IPTV) and is now known as Youview has been given the go-ahead by Ofcom.

Actually Ofcom has decided not to accept complaints from Virgin Media, IP Vision and 11 other parties including BSkyB.

Ofcom's reasons are that the IP TV market is still fledgeling and it's too soon to see if Youview will make a difference in the market, Youview should benefit consumers and if they do harm the competition will the harm outweigh the benefit and the alleged harm may not occur depending on the technical specifications of the system.

Youview has gone through many iterations and current traditional pap-per-view systems like Virgin and Sky have the most to lose if a generic IP TV system can be brought into play that utilises people's broadband to deliver high quality IP TV services. Both BT and TalkTalk are part of the project and will be delivering fibre-to-the-street cabinet/premises (FTTC/FTTP) services which will deliver 40Mb/s - 100Mb/s to the home, which is enough for HDTV, thus negating the need for people to buy satellite TV or cable TV.

The fill press release is available from Ofcom

The hotly debated TV service known as Project Canvas has now come out of hiding to be called Youview TV Ltd and known as Youview.

Youview has several main partners, the BBC, ITV, Channel 4, Channel 5, BT, TalkTalk and Arquiva with innovation partners from Cisco, Humax and Technicolor.

Youview will be available through a set-top-box which connects to your TV aerial and your broadband connection offering access to standard TV services (which can be watched as they're broadcast or after). The standard services will be free, though PayTV options will also be available giving access to movies and other premium content (like shows).

The obvious company that isn't a partner is BSkyB and they tried to kill Project Canvas off initially as a major threat to their PayTV services.

Youview has also published various technical documents which should allow anyone to develop for the platform, provide content services and even build set-top-boxes. How open they'll actually be is as yet unknown as only the original players are currently content providers.

In the US Apple TV (with it's reduced price of $99 for the box) is seen as a threat to traditional broadcasters and more so with services such as

2010/01/22

To BT Infinity and beyond

BT has launched its Fibre to the Cabinet / Premise (FTTx) offering known as 40Mb BT Infinity Broadband. The FTTC offering uses a variant of VDSL to the home over normal copper.

The service is being rolled out across the UK and BT hopes to have 40% population coverage by 2012. This will of course exclude most rural users as it will only work in densely populated urban areas where the distance between the cabinet and the home is short (VDSL/2/2+ only works up to about 100m). Around 4m homes are expected to be within coverage on the launch.

BT Infinity Option 1 costs £19.99 a month with a £50 set-up fee. The user gets 40Mb/s downstream, 2Mb/s upstream and a 20GB data usage allowance.

BT Infinity Option 2 costs £24.99 a month with no set-up fee. The user gets 40Mb/s downstream, 10Mb/s upstream and unlimited data usage. Unlimited in this case means 'fair use' which gives BT the option of cutting users off or charging them for bandwidth.

Both come with an engineer install and a BT Home Hub.

More information is available from BT's Product Pages which have an address checker which shows what speed Broadband is available to the customer - if it's below 40Mb/s then it's an ADSL or ADSL2+ package.

Now could be interesting times as neither BSkyB nor Carphone Warehouse (TalkTalk) have announced their fibre plans, but both are allegedly planning fibre roll-outs to compete with BT (they should co-operate and build a single network to compete with BT, but that's another story) with Sky already testing new IPTV set-top boxes.

BT have definitely got a lead and a huge existing network and existing infrastructure on which to build a FTTx network, will BSkyB, CPW be able to roll-out fast enough to compete?

BT extends FTTP

BT Openreach has said they are now extending their FTTP (fibre to the premises) roll-out and will cover brownfield as well as greenfield areas. Originally FTTP was only planned for greenfield/new build areas.

This will greatly extend the number of homes covered by FTTP and offer speeds of around 100Mb/s, BT's FTTC (fibre to the street Cabinet) are offering around 40Mb/s using VDSL2+.

This is probably a preemptive move to frighten the various other players who may be considering fibre roll-outs such as BSkyB and Carphone Warehouse.

Carphone Warehouse to acquire Tiscali UK

Carphone Warehouse (CPW) are acquiring the assets of Tiscali UK for £236m from Tiscali (Italy).

Tiscali have been up for sale for some time as broadband economics worsen and competition increases. Both BSkyB and CPW have been rumoured to be in the running as well as outsiders like BT.

It seems CPW have got to the finishing post and they'll gain Tiscali's infrastructure and customers. CPW's customer base will increase to 4.25m making them the largest UK (home) broadband provider. There's going to be considerable overlap in infrastructure and staff so CPW will likely make sweeping cuts in both. Tiscali's IPTV platform (previously HomeChoice) will give CPW an edge to compete with BT Vision and whatever Sky are planning. Tiscali only managed to achieve 100,000 IPTV customers (they wanted double that) and maybe CPW will be able to get that out to all their customers.

If CPW can utilise the extra infrastructure and minimise costs then they may be one of the larger players that survives the broadband commoditisation game.

Virgin attracts Liberty Global

Liberty Global may join the battle for Virgin Media with a bid of £11bn.

BSkyB asked to delay the court case with Virgin Media re the Sky channels which Sky withdrew over pricing, which means it wont be heard until next year at the earliest. Normally Virgin Media would have pushed to have the case heard as early as possible so they get the channels back and stop losing customers.

Unfortunately an in-court case could delay any sale pending the outcome. It's much better for Virgin Media to delay the case and let a sale go through, then deal with BSkyB.

Unfortunatey it's bad news for customers who aren't likely to get their Sky content back for a year.