BSkyB confirms The Cloud acquisition

Satellite broadcaster BSkyB has confirmed its takeover of Wi-Fi hotspot operator The Cloud, in a move designed to bolster its Sky broadband services and provide mobile access to content.

BSkyB said that it reached an agreement to acquire The Cloud on 11 January, but completion of the transaction will be subject to regulatory clearance.

The move was widely rumoured earlier this month, and as expected was disclosed during BSkyB's financial results announcement.

If it goes ahead, the acquisition will give BSkyB ownership of The Cloud's Wi-Fi presence with over 5,000 public hotspots around the UK. BSkyB said this would complement its existing domestic broadband services by providing customers with internet connectivity while on the move.

The company also said that The Cloud's network would support its plans to launch a new service to make Sky content available on mobile devices.

"Later in the year, we will launch a new service, Sky Anywhere, to make it easier for customers to enjoy our programmes wherever they are," said BSkyB chief executive Jeremy Darroch.

BSkyB's announcement comes just a day after mobile operator O2 disclosed plans to build a Wi-Fi hotspot network of its own, which will be free to access.

Steven Hartley, principal analyst at Ovum, argued that the announcement will put further pressure on BT, which needs to adapt to the increased competition in the market or risk having its wireless strategy undermined.

"In absolute terms BT has the advantage, although the vast majority of its hotspots come from its Fon network on which top download speeds are just 512 kbps. Faster speeds are possible on cellular networks and promise true mobility rather than Wi-Fi’s nomadism," he said.

"Furthermore, O2 plans to have double the number of hotspots than the Cloud and BT’s non-Fon footprint combined by 2013. O2 can also offer users mobility via its cellular network."