Sky Broadband UK Seek Full Fibre ISP Alliance with Openreach Rivals

sky fibre broadband uk isp

The CEO of Sky UK (Sky Broadband), Stephen van Rooyen, has written a letter to the heads of several alternative “full fibre” (FTTP) network ISPs, seemingly in the hope of opening talks that could result in new wholesale or other agreement to help “increase investment” and “bring ultrafast broadband to more homes.”

At present it’s sometimes easy to forget that Sky Broadband is still the second biggest broadband provider in the United Kingdom with over 6 million subscribers, which is partly because most of their promotional activity tends to focus on Sky TV. However last year’s acquisition by Comcast opened the possibility of a change in direction but so far the new owner has been keen to keep their focus on TV services (here).

On top of this we should remind readers that Sky has already signed a wholesale agreement to deliver “ultrafast broadband” (FTTP and G.fast) products via Openreach’s rapidly growing national network (here). Some sources have tentatively indicated to us that we could see the first products from this surface during the latter part of this Spring. A new broadband router is also coming to help support that.

Despite this Sky, which has in recent years rejected the notion of building their own full fibre network, now appears to be seeking similar agreements with AltNet ISPs including Cityfibre, Gigaclear, Hyperoptic (currently they don’t offer any wholesale solutions) and TalkTalk (FibreNation). However The Telegraph caveats that these exploratory talks will not include discussion of joint investments in infrastructure (sounds more like they’re seeking favourable wholesale arrangements).

Such a move makes sense since a lot of those providers are currently targeting different areas for their deployments in order to minimise the competitive challenge of network overbuild. Sky would thus benefit (coverage) if they could harness several networks to reach as many people as possible.

The caveat here stems from several corners, not least of which is the complexity of trying to produce a simple set of consumers packages when working across several different networks (aggregation), each with different costs and service considerations.

On top of that Sky are arriving somewhat late to the party, not least with Cityfibre having already reached an agreement with ISP partner Vodefone to support their £2.5bn project to make its 1Gbps capable Fibre-to-the-Home (FTTH) broadband platform available to 5 million UK premises in 37 cities and towns by the end of 2024 (here). We assume this deal includes some degree of initial exclusivity.

Curiously the letter is also addressed to TalkTalk’s new FibreNation project, which is interesting because that ISP has already listed Sky Broadband as a wholesale partner for their new network (here). At present TalkTalk’s FTTP platform is only aiming to cover 100,000 UK premises over the next year or so, although they have plans to cover 3 million premises (finding an investment partner to help deliver on that has proven tricky).

Nevertheless Sky’s CEO correctly notes that having the country’s second largest ISP on-board would give any network a huge boost, not least by helping to stimulate consumer demand. Historically the lack of major ISP support has been a problem for some altnets, but the future market for “full fibre” services is gearing up to be much more fragmented than the old Openreach dominated one and thus Sky’s move makes a lot of sense.

Lest we forget that Sky has tentatively talked about moving their TV platform away from Satellite delivery in the future. So far this product (excluding their NOW TV sibling) hasn’t reached the UK, although it’s generally been focused more on catering for areas where a dish cannot be installed. However “full fibre” offers the possibility of completely shifting TV away from Satellite in a much more significant way.

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: