Sky enters £15bn UK mobile market… finally

It’s been in the pipeline for what seems like forever but Sky has finally put us out of our misery and launched its assault on the UK mobile segment.

Sky has become the latest player to offer ‘quad-play’ and is looking to differentiate its proposition with a roll-over feature, allowing customers to take any unused data allowances from one month to the next. While this would be considered a unique idea within the UK, let’s not give Sky too much credit; Sprint has been using data roll-over as a feature for some time now. In any case, the feature will be welcomed by consumers.

The service will make use of Telefonica’s O2 network in the UK and will be officially launched to pre-registered customers during mid-December. It has already started selling the service to employees and claims to have sold more than 46,000 contracts already. The wider UK launch will be in the new year. The deal is SIM only for the moment, though subsidized handsets will be introduced later on in 2017.

“We felt it was time to shake up the mobile market and give customers a completely new way to manage their mobile plan – something no one else is offering,” said Stephen van Rooyen, CEO of the UK and Irish business. “We’ve designed it based on what people told us they want – it’s easy, flexible and transparent and it puts the customer in control. With £2 billion being wasted each year on unused data in the UK, Sky Mobile customers will only pay for what they use.

“Plus we’re giving Sky TV customers a fantastic offer which will allow them to get even more value from their subscriptions. It’s time for people to have a smart new way to manage their mobile contract.”

Alongside the announcement, the team also released a bit of research, which apparently helped them make the decision though we suspect the research would never have had any material impact on the decision to launch an MVNO. It has revealed a few nice insights though.

It is estimated 30% of smartphone owners in the UK do not make a standard phone call on their devices across the week, seemingly preferring OTT offerings, which leads consumers to sign up for more data than they actually need. Sky believe more than 50% of the data allowances in the UK go unused each year, meaning £2 billion is wasted by consumers on unused data. Paying for peace of mind is a more comfortable price than the high charges when exceeding monthly allowances.

The virtual ‘piggy-bank’ as the team describe it will allow customers to take the excess data, store it for up to three years, and dip in when nearing the monthly limit. Another feature will allow customers to change their plan should they find themselves paying too much or not having enough data offers more flexibility for customers, though Telecoms.com suspects there will be some fine print somewhere. Sky’s largest shareholder billionaire Rupert Murdoch is too crafty to be this nice to customers without some sort of reward for Sky.

Existing Sky+ customers will also be able to access their TV recordings from their Sky box at home on their phone as part of the Sync feature, with Sky Go Extra included at no extra cost. The money which can be saved is a prominent feature of the marketing campaign here, as the Sky team is tapping into its current subscriber base to undercut competitors and capitalize on those who have emptier wallets than usual leading into the Christmas period.

Existing customers can save a couple of quid here through the Sync feature, can get free calls and texts within the UK, customise plans depending on data usage and store away some data for a rainy day. Although the mobile bill will remain separate from the rest of the bundle, the Sky team does have quite a substantial customer base to leverage in the first few months.

Sky currently has roughly 11 million customers in the UK, and estimates each household has two mobile contracts. For existing customers there are three options; 1GB for £10 per month, 3GB for £15 per month and 5GB for £20 per month. Those who aren’t already customers will pay £20 a month for 1GB of data and unlimited calls and text, undercutting a similar deal from EE which charges £20.99.

Entry into the ‘quad-play’ market has been a long journey for the Sky team, though it would appear it is almost there. A couple of months to bring subsidized handsets into the contracts and the saga will be complete. The initial uptake of the offer looks to be positive, though expect moves from others in the industry as they are hardly going to welcome Sky with open arms.