UPDATEDSky has today confirmed that it is offering £211m to buy publicly listed UK ISP, Easynet. This follows a period of general speculation, after Easynet issued an official statement on Monday past that they were subject to a possible offer.
Sky are offering 175p per share, around 81% above Easynet’s market price of a week ago.
Not surprisingly, the current Easynet price is now up 44% at 171p.
With this purchase, Sky buys straight into broadband in the UK, gaining a foothold in the Local Loop Unbundling (LLU) market, with 232 unbundled exchanges already under Easynet’s belt.
Importantly Sky have bought into Easynet’s expertise at unbundling exchanges, which, when combined with Sky’s financial clout, will lead to serious competition to the, (in our eyes), feeble rollout of DSL by BT. We also imagine that there will be sweaty brows at Telewest/NTL, the UK cable company over morning coffee.
Sky will gain income from broadband subscription and possibly entice further subscribers to their TV service taking them to their stated aim of 10m. Far more important is a new channel to deliver content through – one they have total control over. They like that.
This move puts BT’s broadband IPTV service on a less secure footing, which, as we broke at the end of September, plans to launch in Summer 2006. At the very least, BT won’t have it all their own way.
Sky has been talking for a while about broadband-delivery ambitions as well as other paths, indeed Sky COO, Richard Freudenstein confirmed as much just over a month ago.
Brace yourself. The news is going to be awash with opinion pieces second guessing what this all means to the future of broadcast and broadband in the UK …