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Cable Technology Feature Article

January 21, 2014

Vodafone, BSkyB in Talks to Take On BT with Quad-play Service

By Tara Seals, TMCnet Contributor

Two behemoths of the U.K. communications landscape are in talks to combine forces to provide a quad-play option for consumers, encompassing home phone, broadband, TV and mobile. According to sources, Vodafone (News - Alert) Group Plc and BSkyB are discussing the market possibilities.

Satellite-fed Sky is of course the top television provider in the country, but former incumbent telco BT (News - Alert) has made significant inroads of late in terms of its IPTV service. It’s also managed to snag two key sports carriage deals which are major differentiators: BT outbid Sky for the television rights to the UEFA Champions League and Europa League soccer tournaments late last year, agreeing to spend $492 million per season over three years for exclusive live broadcasts starting in 2015.

BT has also invested more than £3B in a high-speed fiber-optic network that extends across the country.

BSkyB (News - Alert) already provides Sky Sports content to Vodafone mobile users, so the two are not strangers to partnership. Any new deal would allow Vodafone to offer more of BSkyB’s sports and movie channels on a mobile basis, and the two would team on a broadband service, the Sunday Times reported, citing unnamed sources. It’s unlikely that they would construct a nationwide fiber network however, which would require billions in capex investment--which opens the door to a possible 4G-based home wireline replacement offering.

That would put Vodafone into the home consumer business in a way that it hasn’t been in the past. And in turn, gives it the potential to diversify its revenue streams, by, say, rolling out a multiscreen video service and connected home offerings.

Neither Sky nor Vodafone have commented publicly on the talks, but Vodafone is an exhibitor at the upcoming ITEXPO – taking place in Miami, Florida, January 28-31 – where more information on this merger may become available, as well as other information regarding new services from Vodafone.

Edited by Cassandra Tucker

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