Rupert Murdoch's satellite broadcaster BSkyB is getting set to unveil its plan to offer free broadband to some of its U.K. customers on July 18. BSkyB indicated its interest in broadband last year, when it spent £211 million to acquire high-speed Internet provider Easynet. Easynet has been installing its own network equipment at BT exchanges, which means that, by December, Easynet will be in a position to offer service to about half the U.K. population.
"Unbundling will allow Sky to extend its reach in urban areas into blocks of flats and will enable it to offer a triple-play service for the first time. Unbundling will increase competition, principally in urban areas and particularly for basic TV services, and will undermine the relative position of cable, Sky's main competitor," the market research firm UBS told Teleclick. The new service may initially lose £70 million to £100 million. In the long run, however, the Easynet service may well boost profits by reducing churn rates and locking in television and digital phone customers who might otherwise turn to another provider.