Year of opportunity for O2 and Sky ?
At the end of Q1 2008 OFCOM reported 16.2 million residential and SME broadband connections, a figure that probably exceeds 17 million today. This is about half the total number of fixed line telephone connections.
Sky report some 9 million subscribers to their TV service, and O2 are listed by OFCOM as having the largest number of mobile subscribers in Q1 2008 at 7m on contract plus 11.4m on pre-pay.
Given the large presence of Sky and O2 in UK households there would appear to be a large opportunity for those companies to do much better in the broadband sector. Sky will provide basic broadband to its subscribers in LLU areas for no extra cost and O2 will provide their mobile users (contract and PAYG) in LLU areas with up to 8M broadband service for £7.34 per month or up to 20M for £9.79 per month.
ISPreview list Sky as having 1.8m broadband subscribers and O2 a mere 267,000. The proportion of O2 subscribers taking up the broadband is only 1.45% which is incredibly low given their pricing and the availability of O2 LLU to well over half the population. Even non-O2 mobile users only pay an extra £5 per month over the above figures. Sky’s 22.5% is more respectable but still low when one considers that 60% of households have broadband and some 70% have access to Sky LLU at no extra charge.
Both Sky and O2 were late coming to the Broadband party, and O2 are still enabling exchanges with their LLU service, but surely this is the year for them to exploit the churn of users coming off 12 month contracts and gain a market share more in line with their presence in the Pay TV and Mobile phone markets.
January 6th, 2009 at 12:09 pm
I have been waiting for Sky to unbundle my exchange in Shirley, Birmingham for the past 2 years. It appears they have stopped their unbundling for some reason.