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Is Sky’s purchase of Easynet good for business?

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Sky has announced a 211 million GBP takeover of Easynet the alternative telecoms provider. This deal would give them the infrastructure for a triple play and position them for IPTV (Internet Protocol Television).

Sky has been doing well in the UK but changes in the landscape mean it can’t rest on its’ laurels. The Sky+ DVR (Digital Video Recorder) service has driven growth, but future innovation for advanced services will depend on a two way network connection. The merger of NTL and Telewest means that there will be increased competition in the consumer media consumption space. Finally, the manner in which users consume media is changing; the method such as the Internet is taking a large slice; the format such as the mobile phone will have an impact and we’ve yet to see if the manner in the form of blogs and Web 2.0 will have an influence the mainstream. Consequently, buying Easynets broadband LLU experience and network is a good fit. The media coverage in the Times, Business Week and Guardian are all positive.

I’ve always admired Easynets strategy, they took a risk by entering into LLU early but have made it pay-off. It’s reported that 98% of Easynets customers are businesses, who could be impacted by any shift in strategic focus. Sky will aim to expand the broadband side of the network which will mean considerable investment and change. And whether they have the strategic intent, or the capability to continue servicing business customers is an interesting question. I imagine that there’s going to be a lot of opportunity for the UK business Service Providers.

What do you think, is Sky’s buyout good for business customers and consumers?

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Written by Steve George

October 21, 2005 at 11:18

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