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Sky to become UK’s no.2 broadband provider after acquiring O2 broadband from Telefónica

BSkyB has agreed to acquire O2 and BE’s consumer broadband and telephony business from Spanish giant Telefónica, in a move that will see Sky become the UK’s second largest telecoms provider after BT.

The deal means Sky will take on over half a million new customers, bringing it past Virgin Media in the broadband business stakes.

Under the terms of the agreement, Sky will pay a consideration of £180 million to Telefónica UK for the consumer broadband, home phone and line rental customers served by the O2 and BE brands.

An extra amount, not surpassing £20 million, may then be payable depending on the success of customer migration from Telefónica. Current O2 and BE customers will automatically fall into Sky’s unbundled network.

“Sky has been the UK’s fastest-growing broadband and telephony provider since we entered the market six years ago,” said Sky’s Chief Executive Jeremy Darroch. “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.”