Sky agrees to buy broadband and fixed-line telephony business from Telefonica UK

British Sky Broadcasting Group plc says it has agreed to buy the O2 and BE consumer broadband and fixed-line telephony business from Telefónica UK. The price tag will be £180 million, with as much as an additional £20 million going to Telefónica UK once that company’s more than 500,000 subscribers transition to Sky.

British Sky Broadcasting Group plc says it has agreed to buy the O2 and BE consumer broadband and fixed-line telephony business from Telefónica UK. The price tag will be £180 million, with as much as an additional £20 million going to Telefónica UK once that company’s more than 500,000 subscribers transition to Sky.

Sky will use existing cash reserves for the purchase, which is expected to be accretive to earnings in the second full year of ownership. The deal is expected to close this April.

The service provider says that successful completion of the deal will make it the second-largest broadband provider in the UK. The carrier currently operates a nationwide backbone fiber-optic network that puts it within reach of 84% of UK households.

“Sky has been the UK’s fastest-growing broadband and telephony provider since we entered the market six years ago,” asserted Jeremy Darroch, Sky’s chief executive. “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.

“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,” he added. “We look forward to welcoming these new customers to Sky and giving them access to our wide range of high-quality products, great value and industry-leading customer service.”

“Sky offers great value, totally unlimited broadband which includes unlimited fiber services,” commented Ronan Dunne, chief executive of Telefónica UK. “As we focus on delivering best-in-class mobile connectivity, including next-generation (4G) services, we believe this agreement is the best way of helping our customers get the highest quality home broadband experience from a leading organization in the market.”

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