Sky has become the first MVNO in the UK to join the 5G race, making use of the O2 network.
While Sky Mobile is little more than an ‘also-ran’ at the moment there could be some potential for the brand to cause headaches for the established players, both MNOs and MVNOs. As the leader in the UK premium content market and a healthy broadband business, there certainly are some gains to be made in terms of convergence.
“We will be the only mobile operator to be able to combine the launch of next generation superfast 5G connectivity with Sky Mobile’s unique features including Roll, Swap and Watch,” said Sophia Ahmad, Commercial Director of Sky Mobile.
All of Sky’s current data plans come with the Roll feature, allowing any unused data to be rolled into the next month, while Swap will allow any consumer to upgrade phones without changing contract. The Huawei Mate 20 5G X and Samsung Galaxy S10 5G will be available to customers in November, the target for the 5G launch.
“The mobile network operators need to watch out as this move poses a considerable threat,” said Paolo Pescatore of PP Foresight.
“It is becoming harder for telcos to differentiate on connectivity beyond price alone. Sky armed with its innovative mobile features and breath of content is very well placed to compete head on. For now, from an overall services perspective it seems to be in pole position.”
As we have mentioned before, the success of 5G will largely be reliant on the experience offered to customers as well as the price and value-add services. Relying on O2’s network to deliver its 5G offering might prove to be a weakness for Sky as the MNO has regularly featured at the bottom of rankings when it comes to customer experience.
Interestingly enough, this could create an entirely new dynamic in the connectivity segments.
Sky is not primarily a mobile business and never will be. Its mobile offering is an element of the wider convergence strategy to attract and retain customers, therefore profitability on connectivity is not the only concern. It will be a consideration for the management team, but lower margins can be accepted if there is a greater gain in the bigger convergence picture.
Traditional players have been trying to shift away from being overly reliant on mobile revenues for years, with some success stories but most of the time a maintenance of the status quo. As Sky profits are not primarily reliant on mobile a potential loss-leader position could be created to cause havoc and grow profitability in other business units as well as the overall Sky business.
With all four MNOs and now Sky to offer 5G services to consumers by the end of the year, the UK is set to become one of the most interesting markets to watch worldwide.