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How Sky's about to BE the limit for O2 broadband

The smart choice: opportunity from uncertainty

O2 has begun telling its home broadband customers that they will soon be shunted over to BSkyB's network.

As exclusively revealed by The Register earlier this year, O2 - the trading name of Telefónica UK Limited, which is majority-owned by Spanish parent company Telefonica - was in talks with BSkyB about a possible sale of the unit.

The proposed sell-off of that biz, worth up to £200m to O2, was confirmed by both parties nearly two months after we first broke the story.

Now O2's home broadband customers and subscribers to BE - which was bought by the mobile telco for £50m in 2006 - are learning that their accounts will shortly be plonked under the BSkyB banner.

O2 customers who visit the ISP's website are being told the BSkyB "sale has now gone through". O2 adds: "This means your home broadband contract is now officially with Sky. Sky will be sending you a welcome pack as well."

BE, meanwhile, has already changed its company name to reflect its change of ownership. It says on its website:

Be Un Limited has been bought by British Sky Broadcasting Limited and has been renamed Sky Home Communications Limited.

For now, BE will continue to operate in exactly the same way as it does today. BE broadband and landline services will be moving to Sky’s network, starting from this Autumn. Sky will give you plenty of notice and keep you updated every step of the way.

Meanwhile, the Office of Fair Trading is yet to clear the deal. The Brit regulator is considering whether the proposed buyout would squeeze out competition within the UK's broadband market. The OFT is expected to make a decision on 16 May but it's likely that the acquisition will be waved through.

Broadcaster BSkyB, which is 39 per cent-owned by Rupert Murdoch's News Corp, will add thousands of subscribers to its broadband service once the lengthy migration over to its network is completed.

Late last year, the company moved into third place ahead of TalkTalk and behind BT and Virgin Media, after it confirmed that more than 4 million customers were now on its books in the UK.

The timing of BSkyB's swoop on O2 and BE is interesting given that Virgin Media is in the process of being acquired by US cable giant Liberty Global, which is run by John Malone - an old foe of Murdoch's. The OFT might note that competition is in fact hotting up. ®

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