OFT Rubber Stamps O2 UK and Sky Broadband Fixed Line ISP Merger

As widely expected the Office of Fair Trading (OFT) has today formally “cleared” Sky Broadband’s (BSkyB) £180m+ acquisition of O2 UK and sibling BE Broadband’s fixed line internet and phone customers.

It’s standard practice for the OFT to examine whether such deals comply with the merger provisions of the Enterprise Act 2002 (i.e. a regulatory test to ensure that the deal doesn’t result in a “substantial lessening of competition“). The UK already has a competitive consumer broadband market and thus few expected any obstacles from the OFT.

Meanwhile the merger itself, at least the financial and technical side of it, was officially completed at the start of this month (here) after first being unveiled during early March 2013 (here). The first fixed line customers are expected to be migrated to Sky during the Autumn, which is a phased process that could take just over a year to complete.

Sky has already begun to contact the relevant customers and further details are expected to be revealed over the coming months. In particular there are still some unanswered questions over how Sky intends to handle customers with advanced features, such as static IP addresses and faster upload speeds. So far the operator has only confirmed that they’re “actively investigating what we can do in that space [and] we’re looking at investment in additional features“.

It’s worthwhile noting that BE Broadband customers have been allowed to keep their routers, with Sky also suggesting that they’re “working hard” to develop support for third party routers. At present Sky only ships a quite restrictive (locked down) and pre-configured router to their customers, although some people have been able to extract their passwords from older kit in order to use third party hardware.

At the time of writing the OFT hasn’t yet published the full text of their review, although this is expected to surface “shortly” (here).