The UK market is this week still taking stock of the news that BSkyB, the largest Pay TV provider in the UK, last week purchased the internet networks of O2 and Be Broadband for £180m.
BskyB already has a near dominant presence in the domestic UK broadband market offering ADSL and more recently fibre broadband. But the acquisition now see it become the second largest ISP in the country, adding O2/BE, 560,000 customers to its own 4.2 million, making it the second largest ISP behind UK incumbent BT.
The move really emphasises the link between traditional satellite TV broadcasting and internet connectivity and with Sky’s extensive catalogue now delivered via IP, there’s no doubt that strengthening its broadband market share makes a lot of sense.
However, the move has certainly rung the alarm bells amongst the customers of O2 and especially BE. A few years ago BE lead the way in providing leading edge ADSL2+ connectivity, offering lower contention rates, a better ping and static IP address or the technically minded consumers who cared about these things. And it did it at affordable prices. However, in recent years as connectivity improved and competition grew fiercer it was less able to differentiate itself and the inability to roll out a fibre broadband offering when mainstream providers were doing so only emphasised the feeling that things had moved on.
The one area where an ISP such as BE could still differentiate itself though was in the area of customer service – it has easy to talk to, technically minded assistance, and here its users will be aghast that they have been swallowed up by a giant such as BSkyB. It’s association as part of the ‘evil empire’ of media tycoon Rupert Murdoch with his recent troubles with the UK government over the illegal acts of journalists working for his company News International, does it no favours.
A couple of sample tweets from O2 customers following the news:
“Not happy that O2 have sold their broadband services to sky, I hate anything to do with Murdoch” –
When’s all said and done, for home users a broadband connection either works as advertised, or it doesn’t, so interaction with the company will usually only come when something is going wrong. Keeping the customers happy – from the billing side through to dealing with the problems that arise, is the challenge for Sky, and for all broadband operators around the world. Judging from the initial reactions, Sky is going to have to tread carefully if it wants to avoid a mass exit of its newly acquired patrons and other operators will do well to keep a close on any potential fallout and if there are lessons that can be learned.