Sky to launch mobile network in 2016 with Telefónica UK

Sky has confirmed plans to work with Telefnica UK to provide customers with access to 2G, 3G and 4G services from 2016.

Through the partnership, Sky will benefit from wholesale access to Telefnica UK's mobile, voice and data offerings via the company's network.

News of the deal follows on from reports earlier this month, which suggested Sky might be in the running to snap up Telefnica-owned mobile network O2, which is now in exclusive talks with Three.

However, other reports suggested that Sky and O2 might have been interested in a commercial partnership, similar in nature to the one announced today with Telefnica UK, whereby Sky would white-label the firm's mobile services and offer them to customers.

The move positions Sky as a "quad-play" provider, offering customers access to mobile, TV, landline and broadband services.

This is quickly becoming a popular position for comms providers to put themselves in, as consumer preference for acquiring all their digital services from one provider grows.

Jeremy Darroch, group CEO at Sky, said the partnership with Telefnica UK should pave the way for the firm to build on its grounding in the broadcast and broadband markets.

"We know our 11.5 million customers trust Sky to offer them the best quality and choice and have an appetite to take more from us," he said.

"Through our partnership with Telefnica UK, we can build on our expertise in content, innovation and service to launch a range of exciting new services and exploit the opportunities for growth in the fast-changing mobile sector."

Ronan Dunne, CEO of Telefnica UK, added: "This will widen consumer choice still further and demonstrates the lively competitiveness of the UK market. We're looking forward to working with Sky."

Ewan Taylor-Gibson, telecoms expert at utilities comparison site uSwitch.com, said the deal is proof of how competitive the quad-play space is becoming.

"With Sky piggybacking off O2's network, which also provides services to Tesco Mobile, the tie-up could be bad news for Vodafone, which had been seen as a leading contender for a wholesale partnership with Sky," Taylor-Gibson said.

"Quad-play is proving all the rage amongst telecoms providers, but mobile often seems like the afterthought of these four-way bundles. Many customers are already tied into long contracts so aren't in the market for a new mobile deal."

"Sky hasn't specified if its mobile offering will be for existing customers or whether it will also offer standalone mobile contracts too, however it's likely that exclusive content via its Sky Go app could be offered as a draw," he added.