Sky expands internet telephony service

Sky's plan to launch an internet phone service is likely to involve an expansion of Sky Talk

BSkyB is preparing to expand its internet phone service, according to a report in The Times. 

The newspaper said that Sky hopes to "shake up the market" for internet-based VoIP telephony.

Sky has not released any details about the service and The Times, owned like Sky by Rupert Murdoch's News Corporation, is the only news outlet to carry the story.

The report implies that this is Sky's first move into VoIP, but the satellite giant already has an internet telephony service, Sky Talk, which is available to eight million Sky digital subscribers in the UK and Ireland. 

Sky's reported plan to "launch an internet phone service" is likely to involve an expansion of Sky Talk to a broader customer base. This move was widely predicted when Sky bought broadband provider Easynet for a rumoured £211m last year.

Existing Sky Talk customers use their standard phones to make calls over the internet. BT still owns the line, but call bills come from Sky Talk.

As with similar phone-to-phone VoIP services from the likes of Tesco and Primus, consumers enjoy reduced phone bills and perks like free weekend UK calls. 

Sky joins a raft of other TV and internet companies making the move into internet telephony, including Telewest, Lycos and Tiscali.

EBay-owned Skype remains the global market leader, with 39 million registered users - a number that's increasing by more than 150,000 per day. 

The Times suggested that the move is ultimately aimed at helping Sky retain customers for its core satellite TV market.

Despite increased competition from TV-over-internet services from BT Vision, Homechoice and others, Sky remains on course to secure 10 million customers by 2010.