BT Group PLC (LON:BT.A), TalkTalk and Virgin Media will face more competition in the UK business broadband market as Sky is launching a new product under the Sky Connect brand.
Sky, which is owned by US giant Comcast Corp (NASDAQ:CMCSA), said that the unit will focus on partnering with small businesses and providing them with a better broadband experience.
The average UK SME spent £2,052 per year on broadband, according to a survey in 2019, with 65% of SMEs saying they would consider switching services.
The launch of the Connect product will create over 1,000 new jobs in the UK, Sky said, including 750 specialist roles.
Stephen van Rooyen, chief executive of Sky’s UK & Europe arm, said: “Covid-19 has had a huge impact on small British businesses, with many moving online to survive. We’re launching Sky Connect now, and plan to create up to a thousand new jobs across the UK, because we know British businesses will come out fighting and we want to be there to help.”
Independent analyst Ian Whittaker said: “Strategically, this is a smart move. It expands on Sky’s residential broadband product and opens up a potentially lucrative new revenue stream.”
“Many SME owners are likely to be Sky subscribers for residential services, which should help Sky,” he added, noting that one advantage for Sky over rivals is that it does not have legacy interests to protect.
“Comcast, Sky’s owners, has plenty of experience in servicing SMEs with Broadband in the US market so Sky can draw on that expertise and experience.
“Most fundamentally, it positions Sky well for the adoption of 5G by SMEs.”