Sky & TalkTalk are to join up to create a fibre optic network in York that will be bring internet speeds 3 up to times faster than will be delivered by BT’s fibre optic network.
The deal also involves a third company, CityFibre, who are a specialist with fibre optic projects. The deal consists of BSkyB & TalkTalk both investing £5 million each and CityFibre claiming it’s third of the new company with a central ring of fibre optics that they have already got installed in York.
The joint venture network will install full Fibre To The Premises (FTTP) which will bring the fastest speeds to customers and will mean that the new network will aim to be able to offer broadband speeds of 1Gb (or 1,000Mb) which is currently over 3 times faster than is on offer from BT’s top package which offers speeds of 300Mb.
BT’s top speeds of 300Mb are available where BT have installed FTTP, however across most of the country BT have only installed Fibre To The Cabinet (FTTC) and for the remaining way from the streetside cabinet they use the existing copper wire to connect to houses, this way means that users are not getting a full fibre optic connection.
CityFibre agreed a deal a few years ago with Fujitsu to create a 64 mile fibre ring around the City of York and it is this that they will be building on to base this first joint venture network on.
It is expected that the first customers will be able to be connected to the Sky/TalkTalk/CityFibre network during 2015.
It is not only York who are to benefit from the trio investing in a new fibre network, there is set to be a further 2 cities also chosen where they will roll out to as well in due course.
Sky have gone back on the offensive to lure broadband customers to them as they go in a toe to toe battle with rival broadband provider BT by offering 12 months free broadband for Sky Sports subscribers.
BT Broadband started this latest battle by offering BT Broadband customers free viewing of it’s new BT Sport TV channels that will have 38 live Premier League games available that won’t be available on Sky.
Sky have now countered this offer and switched it round a bit and are offering customers who pay for a Sky Sports TV package free Sky Broadband Unlimited for a year, or 6 months free superfast Sky Fibre broadband which usually costs £20 per month. £14.50 monthly line rental will still be charged.
Those who take Sky Sports TV package will receive Sky Sports 1 & 2, Sky Sports News and Sky Sports F1.
The good news for existing Sky Sports customers is that the deal is available for both new and existing Sky Sports customers, Sky are obviously trying very hard to make sure that few of their current broadband subscriber base make the switch to BT Broadband and that also they can maybe try and lure some of BT’s customers over to the “Sky” side.
Sky are offering existing O2 Broadband customers free Sky TV and free broadband for a year if they switch over to Sky broadband by the end of June.
At the start of March it was announced that Sky would be buying O2 Home broadband & BE Broadband customers from parent company Telefonica in a deal worth £180 million. A combination of factors may have resulted in Sky coming along with this very enticing offer, one being that of the 500,000 home broadband customers that were with O2 & BE, 40,000 are believed to have ended their contracts with the O2 or BE according to results on Telefonicas latest quarter report and Sky are keen to keep the rest. The other reason could well be because of BT’s latest offer of offering BT Broadband customers free access to BT Sports channels which will include 38 free Premier League games for 12 months, Sky won’t want any more O2 broadband customers jumping ship and going to BT rather than staying for the migration over to Sky.
The offer existing O2 Broadband customers are to receive we believe is the Entertainment Extra+ service which comes with 48 HD channels, plus a broadband unlimited package with both of these being free for 12 months. There will still be a monthly line rental of £14.50 per month or £119.40 if paid upfront which is an extra saving of £50. In total the offer is set to save customers £468 based on it’s current charge of £39 per month (excluding the line rental). And customers who do sign up for it will then have to decide after 12 months if they wish to stay on the package or move to another broadband provider.
It is thought that existing O2 Broadband customers will receive a mail shot in the most with a unique reference number to call up with to claim the offer and so it will be worth keeping an eye out for for any existing O2 Broadband customer who fancies taking up the offer.
Sky have admitted that their Sky Broadband service is running slow for a small number of customers due to Sky adding so many new subscribers to use their services.
Sky have said that it is less than 5% of their broadband customer base that are affected by the slower broadband speeds at the exchanges that have been flagged as having problems. It is specifically subscribers in Doncaster, Bristol and north Wales where users are affected but no other specific locations were mentioned in a report with TheRegister.co.uk.
A spokeswoman for Sky told the BBC:
“Following a combination of an underlining increase in network traffic as well as a high rate of new customer additions, we are aware of capacity issues in a small number of exchanges.
We are working on adding new capacity to those exchanges as quickly as we can. We apologise to all customers who have been impacted by this issue.”
Sky broadband customers who were enticed to Sky because of their promise: “We’ll never slow your unlimited broadband down, even at peak times” have in some cases found that their broadband speeds have plummeted during peak hours due to the capacity issues, many of these customers will be feeling they have been mis-sold and let down at the speeds they are connecting at.
BSkyB has become the third largest broadband provider in the UK in the last quarter and passing TalkTalk.
During the last quarter BSkyB added 102,000 new broadband customers for the 3 months ending September 2012 which is a rise of 618,000 over the past 12 months. BSkyB total broadband customers base now stands at 4.1 million which is still a bit behind BT Retail who have 6.44 million broadband customers.
Although TalkTalk have yet to post their most recent quarter results it is unlikely that they will retake BSkyB because at the TalkTalk half yearly results they stood at 4.047 million broadband customers but for the previous 7 quarters they have reported broadband customer losses and we are unconvinced that this is likely to have changed for this latest quarter.
Another positive for BSkyB is that although they are still a good way behind BT retail for broadband subscribers they did actually add 21,000 more broadband customers this last quarter than BT managed.
Although BSkyB to most will be most known for their Sky TV services this part of their business is a much slower growing part of their business, with them only adding 20,000 new customers in the last quarter and just 95,000 over the past year. What BSkyB are focusing on now that they have over 10 million TV customers is to cross sell product to them which is proving successful with one third of their customer base having “triple play” services.
Jeremy Darroch, Chief Exec for BSkyB, said:
“We have made a strong start to the year, delivering another good quarterly performance and continuing to position the business for the long term. Our investment in high quality content and innovative services has delivered excellent levels of loyalty and generated good growth in customers and products. At the same time, we continue to drive improvements in efficiency, reliability and customer service throughout our operations. This approach continues to generate strong financial results with good growth in revenues and earnings. Looking forward, whilst we continue to see a challenging consumer environment in the UK and Ireland, we are well positioned to execute our plans for the year.“
Sky Broadband have hit 4 million Sky broadband customers for the first time which has helped to drive profits up and puts BSkyB in a position to do a £500m share buyback.
The twelve months results for month ending 30th June 2012 show positive movement for the communications provider.
On a like for like basis, revenue was up 4.5% to £6.791 billion, there is also an operating profit of £1.223 billion which is 14% up and there is a chance this could rise to 18% making it the highest level for six years.
Skys total customer base stands at 10.6 million which is 312,000 up on the previous year across all it’s products. A thing Sky will be pleased to see is there is a growing trend for customers to take triple play services, with this being up now at 32% (previously 27%) with 3.2 million customers.
Jeremy Darroch, Chief Executive of Sky, said:
“In what remains a tough economic environment, customers are choosing Sky over other
providers. We’ve continued to add new households and existing customers are remaining
loyal and taking more products from us. More than 9 million homes are now choosing to
watch their TV through Sky+, we’re helping more customers to save money in home
communications and innovative services like Sky Go are adding even more value to their
Sky are to offer customers a 40Mb fibre broadband package this year to give customers an ever greater choice of deals form them.
The Sky Fibre broadband package will be available form April 2012 and will cost £20 per month and will offer download speeds up to 40Mb with Unlimited usage and no limits although there is a £50 activation fee to cover a BT Openreach engineer to enable the fibre broadband in a premises. The Sky Fibre broadband will run on BT’s wholesale fibre network which will initially launch with around 30% coverage to UK homes with this increasing in line with BT rolling out their fibre network across the UK.
BT aim to cover 66% of the UK with fibre broadband by 2015 as part of a £2.5bn investment in their network.
Sky are also soon be offering a free WiFi service for Sky Broadband Unlimited customers which will offer more than 10,000 hotspots across the UK for free, powered by The Cloud in places such as Cafe Nero, Pizza Express and Wagamama.
Stephen van Rooyen, from Sky, said:
“I’m delighted that our existing home communication products are making such an impact with customers. It’s clear that customers are responding to the higher levels of value, quality and service we offer.”
“This year sees a number of enhancements that will ensure we create even more choice. Whether it’s the launch of free public WiFi, extending our network into more parts of the UK, or adding fibre to our product mix, we are focused on meeting the demands of customers and on being their number one choice for home communications.“
Sky Broadband have installed some new fibre technology into part of it’s network that which works at 100Gb and will result in a more stable and reliable network for Sky broadband customers although it won’t mean a speed increase for customers.
The Dense Wavelength Division Multiplexing (DWDM) is 100Gb technology and will help future proof the Sky broadband network as it is able to transfer around 10 times more data than current networks. It will be able to transfer around 7Tb (Terabits) per second and Sky claim that the technology will enable 4.6 million users to stream HD movies simultaneously.
Currently this 100Gb upgrade to the network has only been done between London and Birmingham with a further 5 more locations across the country also set to be upgraded in the next year.
Although the speed of the network is increasing this won’t have an end result of faster speeds for Sky broadband customers, what it will mean though is that going forward Sky will be able to deal with the ever increasing demands for data across it’s network.
Sky broadband don’t manage internet traffic at peak times despite Sky having around 3.4 million broadband customers that have seen an average growth in data usage of 60% per customer. They also believe that by June 2012 that the average Sky data usage will double from 350GB of data per second to 700Gb per second.
The Commercial Director at Sky Broadband, Jon Blumberg, said:
“As an entertainment and communications company with a heritage in great TV and movies, our broadband network has been designed to handle exactly this kind of data-rich content.
With the rapid adoption of services such as Sky Anytime+ and Sky Go, our customers are streaming and downloading more than ever before, as well as watching record levels of traditional TV. Sky Broadband really was built with entertainment in mind and the network innovations we’re announcing today will make sure we’re in good shape to continue to satisfy the demands of our customers.“
Sky Broadband are reportedly looking to buy “The Cloud” so that they can enter the UK public WiFi hotspot market and rival competitor BT.
The Cloud has around 22,ooo WiFi access points across Europe and allows users to connect to a public WiFi hotspot away from the home. Sky Broadband will most likely be looking to offer their customers free access to the WiFi hotspots when they take out a broadband package in much the same way that BT currently does with their customers.
BT has around 2 million UK free hotspots available to BT Broadband customers via it’s BT FON and BT Openzone networks and recent reports also suggest that Virgin Media were looking to roll out their own free WiFi network.
The Cloud has deals in place with companies such as McDonalds, Little Chef and Marriott hotels and claim to connect 3 million laptops and smartphones each month to its network and deliver over 100 million network minutes every month with an average download speed of over 3.5Mb.
An announcement is expected on Thursday about the deal when BSkyB announce it’s latest earnings.
Sky is to offer all it’s Sky broadband customers a free broadband speed upgrade to 20Mb from 1st June.
The move will also co-incide with Sky streamlining it’s broadband offers to just 2 options, either the Everyday Lite which is free to Sky TV customers who also have Sky Talk, or £5 if it is a customer who only takes the broadband but is capped at 2GB of data transfer per month or the Unlimited plan which costs an extra £7.50 per month but does not have any restrictions in place and is supposedly fully unlimited with no traffic management or fair use policy’s.
The 20Mb broadband will be using ADSL2+ technology and like with current standard ADSL the broadband speed you actually receive will depend on your distance from the telephone exchange and the quality of the line.
Both the broadband deals are available on a 12 month contract.
New subscribers online can currently also receive a free £25 M&S voucher of they sign up to a Sky TV package online at www.sky.com.