Sky forges distribution deal with Magnet Networks

24 Oct 2005

Sky Ireland has negotiated a distribution deal with Irish broadband player Magnet Networks in a move that will see the Sky By Wire service distributed to broadband users in Dublin, Cork, Limerick, Wateford and the Leinster region in the months ahead.

Magnet CEO Ingvar Gardarsson said the deal will bring a greater level of choice to Irish consumers in terms of their television services.

It is understood from 31 October, consumers using Magnet’s services will be able to sign up for a selection of Sky sports and movie channels. Channels available from Sky By Wire in Magnet-equipped homes will include Sky Sports 1, 2, 3 and Xtra, Sky Movies 1 and 2 and Sky Cinema.

Prices will range from €31.50 to €49.50 per month. However, as a special introductory offer, there will be a three-month half-price offer available to all Magnet customers who subscribe to Sky By Wire before 31 December. The service will be available initially in parts of Dublin and Leinster, through Magnet’s multi-play digital telephony, digital TV and high-speed digital broadband network, with plans to extend to much of the rest of the city and reach Cork, Limerick, Galway and Waterford in the next few months.

The move indicates Sky’s growing interest in the broadband medium. In recent weeks the Sunday Telegraph unleashed a flurry of speculation with news that Sky’s UK parent BSkyB has been looking to grab a slice of the burgeoning broadband market in the UK and has a war chest of €220m for this purpose.

It is understood Sky had been talking to a number of internet service providers but has swooped on UK provider EasyNet because of its investment in local loop unbundling, the process that involves putting equipment into BT exchanges so companies can control the line into the home and offer a range of services.

Sky By Wire is a new service from Sky that has been developed to make Sky’s channels available to customers on the growing number of television distribution platforms. Sky is the retailer of the Sky By Wire service, maintaining a direct relationship with the customer and control over the pricing and packaging of its channels. In the launch phase, day-to-day sales and customer service activities for Sky By Wire will be overseen by Magnet in its capacity as Sky’s agent.

The negotiations with EasyNet also sparked speculation that Sky, which has a large installed base in the Irish market, may also be considering an Irish acquisition. However, according to Sky, the relationship with Magnet is by no means exclusive. The company said Sky By Wire is expected to be rolled out across further broadband networks throughout the country as the sector evolves. It is currently available in the UK, via the HomeChoice platform.

Delia Bushell, managing director of Sky Ireland, said: “Sky By Wire is a new service that offers customers more flexibility and demonstrates Sky’s commitment to take advantage of the emergence of alternative distribution networks. We are delighted to have reached this agreement with Magnet to launch Sky By Wire in Ireland and to extend the potential audience for Sky Sports and Sky Movies still further.”

By John Kennedy