Sky Calls for UK Broadband Inquiry

By Simon Zekaria

LONDON--Sky PLC (SKY.LN) Monday said it has asked the U.K. communications regulator to push the country's competition authorities to launch an inquiry into the U.K. broadband market, in another broadside against its rival, BT Group PLC (BT.A.LN).

In a statement, the pay-television giant said it believed issues covering both competition and quality of service were sufficient for the regulator, Ofcom, to ask the Competition and Markets Authority, the antitrust body, to open an investigation. BT is Sky's media services rival and the U.K.'s telecommunications incumbent.

The company said BT's infrastructure division Openreach--which operates and maintains BT's phone and broadband networks and which Sky and other operators access to reach telephony and broadband customers--has a history of under-investment which has led to service quality problems.

Sky represents around one third of broadband customers relying on access to the network operated by BT, it said.

In addition, Sky said it is concerned about competition in the market for U.K. broadband services.

"Over the last decade, regulation has supported effective competition and new entrants have challenged BT, resulting in increased choice, lower prices and innovation for customers. However, superfast broadband services are regulated differently and these gains may be at risk from a reduction in competition as the U.K. transitions to services based on the new technology," it said.

"We believe that Ofcom should move quickly to ask the Competition and Markets Authority to undertake a full competition inquiry. A reference to the CMA would allow these vital issues to be examined with increased speed and thoroughness by a body with the powers to take whatever action should be deemed necessary," said Sky's chief strategy officer Mai Fyfield.

BT wasn't immediately available for comment.

Sky and BT are among operators competing for subscribers in the U.K.'s rapidly-developing market for so-called quadruple-play bundled services of fixed telephony, mobile telephony, Internet broadband and TV.

Last week, the CMA referred BT's planned multi-billion dollar acquisition of mobile operator EE--a 50-50 mobile joint venture owned by Deutsche Telekom AG of Germany and Orange SA of France--for an in-depth inquiry to assess its competition effects.

BT Chief Executive Gavin Patterson said at the time that other operators in the U.K. would be able to benefit and compete through "highly-regulated, equal access" to Openreach and wholesale access to EE's wireless network.

Write to Simon Zekaria at [e-mail]

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