BSkyB denies plans to buy UK spectrum
Satellite TV operator reported to have held talks with Everything Everywhere about buying 1.8GHz licences
Published: 28 May, 2012
BSkyB, the UK's satellite TV broadcaster, has denied it is looking to enter the mobile market by acquiring spectrum from Everything Everywhere (EE), though there is still speculation that it will take part in auctions later this year.
At the weekend, The Sunday Times reported that BSkyB was interested in acquiring the 1.8GHz spectrum which EE has to sell as a condition of its merger (between the UK arms of Orange and T-Mobile). It added that shareholders might instead favour an MVNO with an existing cellco, to avoid the multibillion pound cost of its own roll-out. Unlike its arch-rival, cableco Virgin Media, BSkyB does not have its own-brand cellular offering.
But the satellite player said it did not have immediate plans for a mobile move. "While we continue to extend our leadership in mobile content, we currently have no plans to offer mobile access beyond our existing public Wi-Fi network," said the firm. It provides its broadband customers with free, unlimited access to its network of hotspots, acquired with The Cloud, and also has mobile media partnerships with various cellcos.
A source told Total Telecom that it did hold meetings with EE a few months ago, but no commercial discussions ensued. BSkyB would have another option later in the year though, when the auctions of new licences in 800MHz and 2.6GHz are scheduled to be held.
One of the big questions over that sale is whether a new entrant will bid for a licence, although most analysts believe that is unlikely, given the strong competition between the country's four cellcos. Wireline incumbent British Telecom was once considered a likely bidder, but now the main TV providers appear to have the highest level of interest. Cableco Virgin Media has embarked on a program of testing LTE small cells, raising speculation that it wants to supplement its Wi-Fi and MVNO activities with its own network.
Before the auction, EE has to divest about 25% of its holdings in 1.8GHz as a condition of its merger. Since the 1.8GHz GSM band is seen as a strong option for LTE refarming, there could be heavy bidding. EE itself is trying to persuade regulator Ofcom to let it refarm some of its remaining 1.8GHz spectrum itself, to launch LTE services this fall, even before the auctions.
Another alternative for BSkyB could be to acquire 3UK's network. The smallest cellco's parent Hutchison Whampoa has threatened to sell its UK subsidiary if it does not get a fair chance to gain sub-1GHz spectrum in the auctions. If either Virgin or BSkyB do enter the mobile race, they could adopt a different model to that of the traditional operators, for instance by creating offload partnerships with existing carriers or supporting wholesale customers.