The Easynet acquisition is an important part of BSkyB’s triple-play (telephone, broadband, and pay TV) expansion strategy because it provides BSkyB with a fixed-line network that will enable it to push content and offer alternative services without relying on its core satellite system.
The company already offers movie and sports download via broadband, and TV to mobile phones. It said its high-bandwidth satellite DTH is still the best and most cost-effective delivery platform of video content into most UK homes. However, it said the Easynet network will enable it to start offering other consumer services it has not been able to offer before such as broadband access, and Voice over IP.
Easynet’s network is the Marconi-built Ipsaris network, which cost approximately 300m pounds to install. The network itself is made up of 4,450 kilometers of fiber, with metro rings located in London, Birmingham, Glasgow, and Edinburgh. It has a 320-petabyte capacity, and it uses the canal network of waterways that connect most towns and cities in the UK. Easynet says that building the network along the canal towpaths meant the cost of getting the fiber into the ground was a lot cheaper than digging up pavements or roads.
Besides this network, Easynet has also been one of the leading companies involved in local loop unbundling, whereby it installs its own equipment into BT telephony exchanges. The company has until now concentrated on the business market, but following its acquisition by Sky and the fact that Ofcom has ruled that BT must open up its exchange, it is pushing ahead with unbundling in order to expand into the consumer sector.
According to Easynet’s CEO David Rowe, it has 233 unbundled exchanges that reach 20% of UK households. It aims to reach 1,200 exchanges by December 2007, which should give it access to approximately 80% of all UK homes.
BSkyB and Easynet are targeting the second half of this year to launch a range of consumer services. These include a VoIP softphone (a virtual phone on a computer) as well as broadband access. In 2007 they plan to launch VoIP telephony and IPTV.
BSkyB already has a broadband service that allows Sky customers to legally download films from the internet. Sky by Broadband provides movies and sports clips free to existing Sky digital subscribers, although they must have a broadband connection and a PC using Microsoft Windows XP.
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The satellite broadcaster also offers its Sky by Mobile service, which it launched in January 2006. This provides news and sport content to customers’ 3G mobile phones. BSkyB intends to allow up two mobile phones per household to be connected, and it will also include a feature which will users to set recording options on their Sky Plus boxes via their mobile phones. BSkyB said it is tracking 70,000 video streams per day going to mobile phones, and after one month has 10,000 paying customers.
BSkyB said it is also investing in a new state-of-the-art CRM system to cope with all the additional billing requirements it will have to deal with.
