BSkyB 'ready to move into broadband market'
Broadcaster BSkyB is to grab a slice of the rapidly growing broadband market through an acquisition worth up to £150m (€220m), it was reported today.
The proposed swoop for telecoms group Easynet signals the start of battle against cable TV rivals NTL and Telewest, as well as making it a direct competitor against the likes of BT, AOL and Wanadoo.
The Sunday Telegraph said BSkyB had been talking to a number of internet service providers, but opted for Easynet because of its investment in “local loop unbundling, the process that involves putting equipment into BT exchanges so companies can control the line into the home and offer a range of services.
Easynet has its own equipment in 250 local exchanges – giving it access to 5.8 million homes and 850,000 businesses in the UK – but has plans to invest in a further 100. Many of these exchanges are in areas where NTL and Telewest have customer strongholds.
The cable companies, who recently announced plans to merge, already offer a “triple-play” of pay-TV, broadband internet and telephone services.
BSkyB is seen as being keen to grab a slice of the broadband market, with an estimated 50,000 UK consumers taking out high-speed internet every week.
The company, which has almost eight million Sky subscribers, is also likely to use the broadband service to support its move into video-on-demand.
Today’s speculation has been fuelled by last week’s announcement from BSkyB that it planned to raise £1bn (€1.46m) from a bond issue, with some of the proceeds possibly going towards acquisitions.
Other targets may include Pipex, Home Choice and One.Tel, the firm put up for sale for about £300m (€440m) by British Gas owner Centrica.
It was also reported today that two more private equity firms have joined a consortium interested in buying NTL and Telewest.
Kohlberg Kravis Roberts and Providence Equity Partners are said by the Sunday Times to have joined forces with Blackstone Group and Cinven to table a formal bid – worth an estimated £6bn (€880m) – when the merger is completed, possibly during the first quarter of next year.
