Sky to offer mobile services through O2 partnership as telecoms market reshuffle continues

BT created domino effect by acquiring EE, and now its TV rival is upping its game

Sky will offer mobile phone services to UK customers after agreeing to a wholesale contract with Telefonica's O2, in the latest reshuffle in the UK telecoms market.

There have been a whirlwind of changes in the last month in the UK telecoms industry, with BT's purchase of the biggest UK network EE creating a domino effect which will keep regulator Ofcom busy in ensuring that each deal complies with competition law.

The BT-EE deal was followed by Telefonica's announcement that it would be selling O2 to Hutchison Whampoa, which owns rival mobile operator Three, for as much as £10.25bn.

It marks a remarkable change of strategy from Sky - for years it has denied its interest in offering mobile services. When Computing contacted the company ahead of the 4G spectrum auction back in 2012, it said it had "no plans to offer mobile access beyond our existing public Wi-Fi network".

But perhaps after seeing BT ramp up its TV offering by acquiring the rights to show Champions League football along with a host of other sports, and then subsequently acquiring EE, Sky may have thought it was time to finally offer a ‘quad-play' offering of TV, broadband, traditional phone line and mobile services to compete directly with BT.

In a statement, Sky's CEO Jeremy Darroch said that through Sky's partnership with Telefonica, Sky could "build on its expertise in content, innovation and service" and "exploit the opportunities for growth in the fast-changing mobile sector".

There were rumours earlier in the week that Sky had been discussing the launch of its own mobile offering on either O2 or Vodafone, but the firm has struck a deal with the former.

The numerous deals leave the UK telecoms market looking vastly consolidated, and it could prompt European regulators to examine what the competition impact is of the acquisitions.