O2 and BE customers will soon be transferred on to a Sky service, but past transfer fiascos loom large

Home phone and broadband customers of both O2 and BE, who have officially became customers of Sky, are facing a nervous wait to see what this means in the long term for the service they receive and how much they pay.

Sky announced in March that it had bought O2's home phone and broadband business from the mobile operator's parent company Telefonica. The £200m deal affected 500,000 households, and included customers of BE broadband, acquired by O2 last year.

Affected households will be hoping Sky can avoid a repeat of the botched TalkTalk takeovers of Tiscali and AOL that caused endless disputes, and eventually led to the regulator Ofcom levying heavy fines.

The move means there is now less competition in the phone broadband market, which is dominated by four firms: BT, Sky, TalkTalk and Virgin.

Sky is keen to reassure customers of O2 and BE that there will not be a repeat of the Tiscali fiasco. It says it will be honouring the terms of all current O2 contracts, and that the migration, which will not start until August, will be phased in. It says when the switchover takes place customers will lose their connections for just a few minutes, and they will be given plenty of warning beforehand.

Once all the old O2 contracts have expired Sky plans to have every phone/broadband customer paying the same, with customers coming off their existing O2 contract automatically being offered the equivalent Sky deal. Any customers who are out of contract, and who don't wish to join Sky, can switch now or at the end of their deal in the normal way.

"We'll start moving O2 and BE home broadband and phone customers over to our state-the-art network starting from autumn. We'll be in touch with customers at every step way and will work in partnership with O2 to ensure it's a smooth process," says a spokeswoman.

According to our comparison of all three tariffs, customers should notice few changes when they are moved on to Sky's package. BE broadband-only customers will pay £15 a month if they don't take a calls package, and will have to move to direct debit payments to avoid a £4 a month credit card surcharge.

However, Sky's Anytime calls package includes free calls to 0870 numbers but omits those to the 0845 numbers now used by lots of banks and insurers' call centres.

Those who pay Sky for its TV package, but had used O2 for their phone and broadband, could see their total monthly bill fall by a few pounds.

The big question for many is what this will do for service standards. When TalkTalk took over AOL and Tiscali it led to billing problems and number of disputes with customers over promises made by the previous company.

Marie-Louise Abretti, telecoms expert at uSwitch.com, says customers will be concerned about how Sky handles the transition. "Following TalkTalk's takeover of Tiscali in 2009, Ofcom hit the providers with £3m in fines for wrongly billing customers, mainly caused by problems with integrating accounts. It's vital that Sky learns from this and ensures consumers don't lose out."

She says Sky's "truly unlimited downloads with no traffic management" will have a big appeal to customers, but predicts that some O2 mobile customers may start shopping around for a better deal.

"While some customers will be worried about the hassle of finding a new provider, it could be a great opportunity for them to ensure they're getting the best broadband – and mobile – deal for their needs. For Sky TV fans, in particular, this could be a great time to bundle products, which can be cheaper and more convenient."

New customers don't have to worry that the company is underfunded. Sky this week reported pre-tax profits of £966m for the nine months to 31 March, up from £899m a year earlier.

Miles Brignall

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source: http://www.guardian.co.uk/money/2013/may/04/sky-o2-broadband-deal-transfer


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