Sky set to offer broadband to challenge competitors

LONDON - Sky is set to unveil a cut-price broadband offering tomorrow to challenge rivals Carphone Warehouse and France Telecom-owned Orange.

The offer follows from Sky's purchase of UK broadband provider Easynet as part of a £211m deal last year, which allowed the broadcaster to enter the increasingly important broadband market.

The new service will offer between 2Mb download speed for Sky TV subscribers, no matter what package they take and up, and 16Mb broadband for those willing to pay an extra £10 a month on top of their usual subscription.  

Sky is trying to create a foothold into the market, before the entrance of major players like Telefonica's O2 and the Vodafone network into the broadband market, expected to happen next year.

The acquisition of Easynet gave Sky full control of Easynet's broadband services, which serve more than 4m homes in the UK.

The footprint is set to extend to 5.8m homes and 850,000 businesses by the end of the year when 100 more internet exchanges are added.

The deal should also help Sky's position against the newly-formed alliance between Virgin and NTL, which was officially signed off as part of a £962m deal, creating one of the UK's largest broadcast and telecommunications companies.

The deal means that the merged company will now combine services to offer customers what has been dubbed a 'quadruple-play' of television, internet, mobile and landline services, taking on its competitors.

James Murdoch, chief executive at BSkyB, said: "Sky Broadband is a compelling product, which rewards our 8m customers with a quality service offering flexibility and great value.

"Sky is ideally equipped to enter the large and growing markets of broadband and telephony and by pushing the boundaries of the home entertainment market, we will help our customers realise the full potential from technological convergence.

"This is a transformational new initiative for Sky."

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