Sky Starts Mobile Service in U.K.
Sky is about to jump into the U.K. wireless market, betting that even as a latecomer it can pry customers away from the four established competitors by harnessing its powerful entertainment brand and millions of existing subscribers, according to Bloomberg. Prospects for Sky’s mobile offer remain hard to pin down for analysts. Their forecasts for the company’s share of the 15.2 billion-pound U.K. market range from as little as 1 percent to 10 percent, which would bring it close to CK Hutchison Holdings’s Three U.K., now the No. 4 player.
The outlook for Sky’s offer remains clouded by a lack of details, including pricing. Guy Peddy, an analyst at Macquarie Bank in London, originally estimated Sky could capture about 2 million customers by mid-2021. He’s raised that figure by more than 50 percent to 3.12 million, saying this week in a report that the opportunity is bigger than he thought and the offer is more sophisticated. “Wireless risks for the existing operators are understated,” he wrote.
The type of customer Sky attracts is as important as the number. That’s because its biggest rival, BT, has been busy establishing itself on Sky’s home turf in pay-TV. The former U.K. phone monopoly this year expanded its slate of Premier League soccer matches, long a Sky stronghold, and acquired mobile operator EE. That gave it a “quad-play” lineup of fixed and mobile phones, broadband and television. By adding a mobile offering, Sky has a chance to retaliate.
Sky says it sees “substantial” potential for the cellular service. What little it has revealed suggests that the company, whose biggest investor is Rupert Murdoch’s 21st Century Fox, is confident it can poach mobile customers from its rivals by bundling services across platforms. Existing Sky customers who indicate their interest in the mobile product online are told it will be “the smart network for your smart phone.” Research suggests two-thirds of Sky customers would consider the company’s mobile offering. They’ve been able to register since October.