Could Sky and Vodafone be planning a merger?

James O'Malley Uncategorized Leave a Comment

Interesting gossip from ISP Review this morning as it is speculated that Sky and Vodafone are in the midst of high level talks about a possible merger or collaboration – and when you think about it, it actually makes a lot of sense.

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For a few years now both companies have had mutual rivals in the form of EE and venerable old BT. EE, as Kevin Bacon relentlessly reminds us, offers a “triple play” of services: mobile, home broadband, landline services. And BT in addition to doing broadband, landlines and TV are expected to be launching a 4G service at some point soon (they won a slice of 4G bandwidth when the government auctioned it).

So given that Sky can do telly, landlines and broadband – and Vodafone can provide mobile services, a combined company competing on all fronts could mean they can compete on all fronts.

For the companies, offering extra services isn’t a wholly new idea. Vodafone used to offer their own broadband service but it wasn’t hugely successful – and Sky have only recently snapped up O2’s home broadband business.

What’s interesting about the rumoured Vodafone deal though is how it would work in practice. The two companies already cooperate in a small way – one of Voda’s key offers is free Sky Sports to 4G customers – so there is speculation that this tie-up could just be enhanced. If they wanted to go for a full merger though, then this would create a giant new company.

As things currently stand according to ISP Review, Vodafone are the larger company so could gobble up Sky – who in addition to having home broadband have a rather massive TV operation on the side. Could we be tuning into The Simpsons on Vodafone 1 or catching the headlines on the Vodafone News channel?

By James O'Malley | January 20th, 2014