Leading UK pay TV operator Sky has launched its first sim-only mobile contracts. The services, launched 18 months after it first announced an MVNO agreement with UK operator O2, will initially be available to Sky staff and 46,000 pre-registered customers ahead of a wider launch planned for January 2017. Sky aims to offer plans with mobile handsets in spring/summer 2017.
Sky is offering three tiers at launch: £10 ($12.4) per month for 1 GB; £15 per month for 3 GB; and £20 for 5 GB. Existing Sky TV customers can also get free unlimited UK calls and text messages (for up to five sims per household). Non-Sky TV customers can pay a further £10 per month for unlimited calls and messages or pay 10p for each minute or SMS they use.
Other features of Sky’s mobile plan include:
- Rollover data - unused data can be stored in a “piggy bank” available for all members of a household for up to three years.
- Sync with Sky+ - which downloads content recorded on a user’s Sky+ box to their mobile handset.
- Flexible contracts – users can opt to upgrade their contract at any point, including mid-month upgrades.
Mobile accounts can be managed through existing Sky customer support channels and apps, but will initially only be sold as separate packages and not part of quad-play bundles.
Sky forgoes full quad-play strategy
Sky has not followed the full quad-play route, but the launch of its own brand mobile service – integrated within its existing customer service and account ID structure – will help mitigate the potential threat posed by the development of more comprehensive quad-play offers from its competitors. Quad-play services have started to gain traction in Europe, but the UK is relatively underdeveloped with limited services from Virgin Media and TalkTalk and only recent moves by BT/EE. Offering its own mobile package will keep Sky in a competitive position for customers looking for a single provider for all their services. Providing standalone contracts should also help with user acquisition – Sky can sign customers up outside of TV contracts – but this will not offer the same churn reduction benefits that have been reported by other quad-play providers.
Mobile proposition fails to take advantage of Sky’s core content assets
Sky hopes its positioning around data flexibility and transparent pricing will be enough to attract subscribers, but its mobile launch does not make the most of its core strength which is its content. Instead, it is aiming to capture share in the highly competitive UK mobile market through the strength of its brand and its flexible data positioning. This is a big challenge and Sky’s success will depend on its marketing capabilities: rollover data plans are not new to the UK market (but Sky could market these more effectively than its competitors); Sky’s pricing is competitive but not disruptive; and it will need to clearly communicate the benefits of its flexible upgrade plans to attract new customers. Other UK mobile operators will be happy to compete with Sky on largely mobile terms rather than face a threat that was positioned around the strength of its content brand.
Sky believes it has a strong existing subscriber base from which to acquire mobile customers, its consumer research indicates that there are currently 23 million mobile contract customers (about two per household) among its TV customer base.
Rather than simply compete on the strength of its mobile tariffs and service, Sky could have done more to leverage its content assets by bundling content or zero-rating mobile data for some of its services. Sky claims that its agreement with mobile network operator partner O2 UK is the “deepest MVNO” ever, but without fully owning its own infrastructure and mobile spectrum, there are technical and cost-based limitations as to how much at it can combine content and data incentives – aside from any potential net neutrality concerns surrounding zero-rated offers.