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Sky to buy TalkTalk and overtake BT?

Sky is rumoured to be interesting in buying TalkTalk, according to market analysts. If the merger went ahead it could see Sky overtaking BT as the number one provider of broadband services in the UK.

The most recent set of figures posted by the three ISPs shows BT leading the pack with 6.3 million broadband subscribers. Sky follows with 3.9 million with TalkTalk close behind with 3.7 million.

Sky and TalkTalk’s current customer base combined would work out at 7.6 million, leapfrogging BT to take the top spot.

Sky to buy TalkTalk and overtake BT?

Speaking to the London Evening Standard, Liberum Capital’s Lawrence Sugarman said “We believe Sky is keen to build on its broadband position,” adding that buying out TalkTalk “could be an ideal way to launch a response” to BT’s bullish football moves.

BT has turned up the heat on Sky recently by splashing out big bucks for broadcast rights to Premier League football.

BT has also plans to launch its own BT-branded version of the Humax YouView box which was unveiled this Wednesday.

This is thought to give subscribers the basic YouView service plus access to BT-owned content – i.e. the football. Sky’s Now TV service is also headed to YouView. This could provide access to the Sky-owned Premier League games on an on-demand/pay-per-view basis. As we said on our opinion piece on Wednesday, this means that BT’s YouView boxes represent a serious challenge to the Sky-dominated world of Premier League broadcasting.

Such a merger would have to be approved by Ofcom before going ahead. Given TalkTalk’s relatively recent acquisition of Tiscali, the merger would be yet another shrink in a market that’s dominated by six big players.

Both Sky and TalkTalk declined to comment on rumour and speculation when we spoke to them.