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Sky sidles up to O2, whispers: 'Fancy a little FOUR-PLAY?'

It's been a long time coming *fnarr fnarr*

As we predicted, Sky is to launch an MVNO and get competitive against the other networks' four-play offerings.

What we got wrong in our prediction was that the deal would be with Vodafone; Sky has instead jumped into bed with O2. The deal will allow Sky to offer a Four-play service of TV, Broadband, fixed and mobile phones, the broadcaster plans to start the service in 2016.

O2 is the network which turned down Virgin Mobile. It’s unusual for O2 to do a direct deal with another company for an MVNO.

The only virtual operators on O2 are Giffgaff, Manx Telecom, Lyca and Tesco Mobile. The first is wholly owned by O2, while the second was when the deal was done – although it was sold in 2010. Lyca is independent and Tesco is a 50:50 joint venture, with O2 owning half the shares.

Typically O2 looks for around a million minutes a month for an MVNO, but the environment is very different to when the Virgin deal eventually wasn’t signed. With four-play looming there is a need for diversification.

Vodafone has announced that it will be getting back into consumer broadband, Talk Talk has bought Blinkbox and, of course, BT has bought EE.

O2’s masters at Telefonica have no grand plan for four-play which leaves O2 out in the cold. The new masters at Hutchison don’t seem to want to sell the other services either.

This makes Sky a good fit. The company has a huge consumer base and is a great route to market, is a strong player in the other three services. And Sky isn’t shy of fighting BT. ®

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