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BSkyB to launch standalone fat-pipe service?
Going solo...

By Reuters

Published: Wednesday 05 September 2007

Pay-TV company BSkyB is considering the launch of a standalone high-speed broadband service after the successful rollout of its internet offering to existing customers.

BSkyB said in July it had signed 716,000 broadband customers since it launched last year, to become the fastest-growing internet provider in the UK.

A spokesman said: "We're now examining options to broaden access to the benefits and value that we can provide. However, no plans are confirmed at this time."

BSkyB launched its broadband service last year, bundled with its pay-TV offering, in a bid to retain customers, and analysts have widely welcomed the move.

Any standalone launch by Sky would pose yet more competition to the incumbent providers in the internet market, such as BT, which has more than four million customers, Tiscali and Virgin Media.

Within its traditional role of providing paid-for television, BSkyB is also facing stiff competition from cable operator Virgin Media and groups such as Tiscali and BT, which have also launched broadband-based TV services.

Analysts at UBS said a standalone service would make strategic sense for Sky, as it could generate incremental revenue while marketing its TV offering to new customers, although UBS said the pricing would be crucial.

UBS said: "The most important issue will be pricing and the avoidance of any confusion between its pay and non-pay-TV broadband offerings.".