O2 buys broadband network Be to take on rival networks

by Mark Banham, Brand Republic 20-Jun-06, 15:55

LONDON - Mobile phone company O2 has bought UK broadband firm Be for £50m, entering the broadband sector already straddled by mobile networks, including Orange and mobile sales retailer Carphone Warehouse.

Be is currently building its own national broadband network and plans to cover more than 50% of the population by the end of this year and more than 70% of the population by the end of 2007.

In April, Carphone Warehouse offered a broadband and phonecalls package through its TalkTalk offering. Carphone Warehouse tagged the deal as "free" broadband, but had a fixed fee of £20.99 a month for all phonecalls and broadband capabilities.

Orange, a major competitor to the Telefonica-owned O2, has been offering internet services since owner France Telecom rebranded Wanadoo as Orange Broadband in June 2005. Orange is offering free broadband to customers who signed up for certain mobile packages.

Peter Erskine, chairman and chief executive of O2, said: "The O2 Group benefits greatly from the experience of Telefonica and insight into other markets such as the Czech Republic and Germany where customers have clearly demonstrated a demand for integrated broadband and mobile packages.

"Building on our existing fixed and mobile capability in Germany, the Czech Republic and the Isle of Man, Be's superior broadband operations and services help us fulfil our previously stated aim of adding high quality broadband capability to our portfolio in the UK."

Dana Pressman, managing director of Be, added: "With 16m customers in the UK and significant opportunities for future growth in fixed and mobile, this is the start of an exciting new era for all of us within Be."

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