Sky to buy Telefonica’s UK broadband unit for £180 mn

UK's largest pay television company British Sky Broadcasting Group Plc (Sky) yesterday agreed to buy telecom giant Telefónica UK's broadband and fixed-line telephony business for approximately £180 million ($270 million).

With the acquisition, Sky is poised to become the UK's second-largest broadband services provider, building on its existing position as the country's fastest-growing broadband and telephony business.

In addition to the agreed consideration of £180 for the broadband, home phone and rental customers served by the Telefónica's O2 and BE brands, Sky may also pay an extra amount contingent upon the successful delivery and completion of the customer migration process by Telefónica UK.

On completion of the deal, Sky will gain Telefónica UK's broadband and fixed-line telephony customer base of around 560,000, thereby increasing its customers to over 4.7 million. The company also hopes to benefit from the growing demand from customers for multiple products.

Sky's chief executive Jeremy Darroch said, ''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,'' Darroch further stated.