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It's already been a packed year for Sky. The UK broadcasterjust launched the second-generation of its all-in-one Glass TV, with a more affordable model in the works for this autumn. But Sky could face increased competition following the £15 billion merger between Vodafone and Three.
According to sources speaking to The Daily Telegraph, executives at Vodafone and Three have discussed rolling out a subscription TV service in the wake of their merger to challenge Sky TV, BT, and Virgin Media. The push into the pay-TV market would underscore efforts by the newly merged company to establish a stronger foothold in the broadband market.
Telecoms companies often bundle television services with their internet connections as a way of enticing more customers on to their networks. While Sky has secured the paperwork to ensure its satellite broadcasts continue until the end of the decade, it's increasingly clear that we'll never see a follow-up to the Sky Q box that uses the same dish technology. According to Sky, 90% of new customers choose one of its internet-powered options, like the best Sky Stream deals or best Sky Glass deals. These work with broadband from any supplier... Sky also offers bundles at a discount.
BT-owned EE and Virgin Media already offer similar pay-TV bundles, which can be bundled with a full-fibre broadband connection.
Discussions about launching a new Vodafone-Three television service are believed to be in the early stages, so don't worry about cancelling your current contract in anticipation of switching in the coming months. The mooted service would offer access to live television via broadband — like Freely, which launched last year and was updated with access to GB News in January — as well as access to streaming services such as Netflix and Prime Video.
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If accurate, the rumoured move would put Vodafone and Three in direct competition with established players in the TV market.
Vodafone and Three have both expanded into home broadband, although the latter still relies on its 5G network to power home Wi-Fi networks, as well as its pay monthly smartphone contracts and SIM-only plans. However, neither of these firms has experimented with set-top boxes or telly bundles before.
The strategy aligns with the industry trend of "convergence", where telecom companies offer multiple services to increase customer loyalty and drive higher average revenue per user.
Sky Stream combines full-fibre broadband with exclusive entertainment channels and Netflix from £35 per month, with options to add Sky Sports, Sky Cinema, 4K Ultra HD picture quality, and additional channels for an extra fee. Sky Stream is available as a 30-day rolling contract for those who want to customise the bundle of channels they're paying for each month — something that used to only be possible with NOW TV.
Virgin Media offers packages with its full-fibre broadband and a streaming Flex box, starting from £30.99 per month, which offers access to free-to-air channels and streamers like Netflix, Prime Video, and Disney+, to name a few. If you subscribe via the Flex box, Virgin Media will offer 10% cashback that can be claimed against your monthly Direct Debit.
Get Sky Stream + Netflix + Full Fibre 150 in a bundle
Sky Stream is the latest set-top box released by Sky. It lets you watch, pause and restart live television via a Wi-Fi connection. Essential TV comes with Sky Atlantic for access to hit US shows like The Last Of Us, Euphoria, The White Lotus, and House of the Dragon. Sky will also bundle a Full Fibre 150 connection with a minimum speed guarantee
Sky Stream + Essential TV + Broadband
$35
EE TV provides a choice between its own custom-designed EE TV Box Pro or an Apple TV 4K with its own EE-tweaked remote control, with packages from £51 monthly. EE offers the ability to stream live television via your full-fibre broadband — as well as exclusive Sky TV channels.
TalkTalk positions itself as the budget option with its TalkTalkTV Hub at just £5 extra monthly on top of broadband plans.
Even after the merger, Vodafone and Three will remain a small player in broadband with a market share of just 6%.
Vodafone has been placing greater emphasis on its broadband offering in recent years. While the company does not operate its own infrastructure, it has signed wholesale deals with both BT's Openreach and challenger CityFibre.
The £15bn merger, which secured regulatory approval in December, is expected to complete in the first half of this year. The companies have committed to invest £11bn in UK infrastructure, a pledge they are "happy for Ofcom to monitor and enforce".
The merger will create the UK's largest mobile provider with around 27 million customers and reduce the number of network operators from four to three. The Competition and Markets Authority (CMA) initially flagged concerns about the deal, suggesting it could "lead to mobile customers facing higher prices and reduced quality."
Vodafone and Three first announced their intentions to merge in a £15 billion deal back in summer 2023, with the final marriage between the two popular brands only expected to complete sometime later this year
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The regulator was particularly concerned as Three is "generally the cheapest" of the main mobile networks in the UK. Combining with Vodafone could "reduce rivalry between mobile operators to win new customers," potentially causing prices to rise.
Executives from both companies publicly disagreed with the CMA's assessment.
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The CMA's final decision on the deal came in December 2023, when it secured regulatory approval. Nevertheless, the companies have taken steps to address the regulator's concerns about potential price increases.
Vodafone and Three have pledged to cap their lowest-cost mobile plans at £10 for two years from the completion of the merger. This promise applies to "value-focused" customers on SMARTY deals, which currently offers plans for as little as £5 a month.
The cap will also apply to Voxi For Now social tariffs, available for people receiving government benefits. The companies have also committed to encouraging virtual providers to access their network, allowing smaller operators to offer competitive deals for customers.
