BSkyB and TalkTalk join forces to reduce reliance on BT

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Rivals BSkyB and TalkTalk have teamed up to invest in their own ultra-fast fibre broadband network in an effort to reduce their reliance on BT’s wholesale network.

Sky and TalkTalk are launching a trial in York, with each company spending £5 million in a joint venture with AIM-listed operator CityFibre.

They will bypass BT’s infrastructure and offer fibre to people’s premises at speeds of 1 Gigabit or 1000 Mbps — 50 times faster than standard broadband.

The plan is to roll it out to more cities but CityFibre does not operate in London.

Espirito Santo bank said the alliance made sense as Sky and TalkTalk do not own their own broadband infrastructure and “it will give them negotiating power with BT”.

TalkTalk chief executive Dido Harding said: “This will bring competition to the infrastructure market and that has to be good for Britain and, in the end, for BT, although they may not be feeling that way this morning.”

It could ultimately lead to TalkTalk ceasing to use BT but “it’s a very long way away”, she added.

CityFibre boss Greg Mesch said that demand for fibre was soaring as standard broadband “will not be capable of handling the data needed” in five or ten years.

Joe Garner, chief executive of wholesale arm BT Openreach, said: "I welcome the competition." He insisted it "can only be a good thing" but pointed out "Openreach already offers 'fibre to the premises' in parts of York".