As announced in March and confirmed at the start of May, Sky has bought out O2 and BE broadband (the latter was actually a part of O2, and both were owned by parent company Telefónica).
This effectively makes Sky the UK’s second biggest Internet Service Provider (ISP), behind BT in first place and in front of Virgin Media in third.
Absorbing the O2 and BE customers will boost its broadband customer base from 4.2million to 4.78million subscribers.
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.”
I’m an O2/BE customer, how will this affect me?
For now, O2 and BE broadband contracts will continue to be honoured as normal. This includes discounts on O2 broadband for O2 mobile customers.
Migration to Sky contracts will begin in the autumn, but Sky is writing to all O2 and BE customers in the meantime extolling the virtues of its services and trying to convince people to switch earlier voluntarily.
Until autumn, if you have any problems or questions about your account, you should still contact O2 or BE as usual. You can also continue to view and manage your bills on the O2 and BE websites.
If you use an O2 or BE email address, you’ll still be able to use it for now, but your free storage will be reduced to 20MB. You’ll be able to use Sky’s Yahoo-based email service once you’ve moved.
What will happen in the autumn?
You’ll be moved onto a Sky contract (unless you decide to leave - more on that in a minute) and your bills will change accordingly.
In a Q&A on its website, Sky says: “Right now, we are working through the pricing for each of our new customers, so we can offer each of you the best possible package at the most competitive price when you move over to Sky starting later this year. We’ll be in touch well in advance of your transfer to tell you all about your new Sky package(s) and prices and what your options are.”
The move will see you migrate to Sky’s ADSL2+ network, which according to Ofcom figures is marginally slower than that of O2.
As of November 2012, Sky’s average download speed was between 8 and 9.7Megabits per second (Mbps), whereas O2’s was 9.3 to 11.2Mbps.
Of course, when you eventually move to Sky you might be able to sign-up for fibre optic broadband, if you live in a fibre optic area. Sky uses BT’s fibre optic technology and its Openreach network, which currently serves 11million homes with BT Infinity, so the coverage is pretty good, and growing.
Sky says it’s working closely with O2 and BE to make sure the migration goes off without a hitch. It said: “We’re already working closely with your current provider to make sure your services are transferred over smoothly and aren’t disrupted in any way.
“We’ll give you plenty of notice ahead of the transfer and let you know all the details of your new service in advance. Then, on the day of the transfer, we’ll do everything for you so you won’t need to do a thing.”
You’ll also be able to continue using the router provided by either O2 or BE after the switch.
What if I don’t want to be a Sky customer?
If your existing contract comes to an end before the migration to Sky, you can of course take your business elsewhere. Head over to our broadband channel and you can see what other providers are offering.
Otherwise, Sky says: “If in the event you are unhappy with the proposed changes, then you will have an opportunity to cancel your services without charge.”
Will the takeover affect competition?
O2 and BE will disappear from the broadband market, which means there will be fewer providers to choose from in future as BT, Virgin Media and Sky continue to dominate the market.
The industry regulator Ofcom says broadband competition is in pretty good shape, though.
Back in 2005, it worked with BT to launch Openreach, a new BT division to provide services to its rivals. The number of ‘unbundled’ lines (where providers offer services using BT’s copper telephone network) recently reached the 9million milestone, representing a 70-fold increase since 2005.
This increased competition has brought the average broadband bill down from £23.60 a month eight years ago to £13.11 today.
Ofcom predicts that fibre optic roll-out will increase rapidly over the coming months, reaching more households, which should also encourage competition.
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