BSkyB to enter broadband market with takeover of Easynet

BSkyB to enter broadband market with takeover of Easynet

	Published : Mon, 17 Oct 2005 09:05 By : Paula Demarzio Print this Story

British Sky Broadcasting (BSkyB) is ready to foray into the broadband market when it takes over broadband supplier Easynet which is valued at ₤150 million. Earlier, Rupert Murdoch controlled BSkyB, had raised 1 million pounds through a corporate bond issue. The company had announced that it would spend a part of the money for acquisition.

Acquisition of Easynet would help BSkyB to redirect some of its broadcasting through the internet. According to some analysts, most TV programmes would be watched through computers in the near future. Programmes being aired through TV antennas, satellite dishes could be routed via broadband internet.

Both these companies were reportedly engaged in "serious discussions", according to market sources. It is also expected that takeover of Easynet could be announced this week itself.

This is an attempt by BSyB to arm itself from competition coming from its cable TV rivals such as AOL, BT and Wanadoo. If the deal goes through, chief executive of Easynet, David Rowe would stand to gain more than 4 million pounds from his 2.5% stake in the company.

BSkyB would be able to offer “triple play” services of pay-TV, Telephone services and broadband internet access to its subscribers numbering 8 million. At present, its leader in this field is NTL which bought off Telewest earlier this month.

Easynet was targetted by BSkyB because it is one of few telecoms operators to invest substantially in "local loop unbundling". The resulting network will be of high-speed which would help BSkyB reach about 4.4 million consumers, mostly households, in major cities of England and Scotland where NTL and Telewest are presently strong.

BSkyB's subscribers, as of now, have to plug their set-top boxes into a phone line in order to be able to receive the fully interactive Sky service. They can now do away with them once Easynet becomes a part of BSkyB.

Acquisitions for BSkyB on the anvil are likely to be Homechoice and broadband supplier Pipex.