Sky to Build Own U.K. Broadband Access Network?

Sky, the U.K. ISP, has become the first major U.K. ISP to sign up for a duct-and-pole-sharing trial with BT. Typically, agreements of that sort are necessary when a service provider is getting ready to build a new network, so one must assume Sky is getting ready to build a facilities-based fixed network.

ISPs in the United Kingdom also have the ability to buy wholesale services from Openreach, rather than investing in their own access facilities. So the strategic choices for U.K. ISPs are the typical "build versus buy" alternatives. If it builds its own access network, Sky will have more control over its own pricing and packaging, as it will not be limited, cost-wise, by the built-in wholesale cost of its inputs.

If Sky wants to under-price BT retail products, for example, it can more easily do so if it fully controls price inputs on its owned infrastructure. Likewise, if Sky wants to create new packages that are differentiated from BT's, or those of wholesale customers using the BT wholesale access products, Sky can more easily do so on its owned infrastructure.

BT also signed up business internet service provider Call Flow for a three-month trial to test out the system and assess "real costs" connected with ISPs deploying their own broadband network using BT's wholesale "Openreach" infrastructure.

Sky in surprise duct-and-pole-sharing trial with BT