Vodafone plotting to swoop on Sky: Industry shake-up to spark wave of mergers in new year

VODAFONE could be set to make a sensational multibillion-pound offer for Sky as a telecoms industry shake-up gets underway.

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Voadfone is looking to bid for Sky, valued at around £15 billion

According to people familiar with the matter, Vodafone could launch a new year bid for the satellite broadcaster, which is valued at about £15 billion.

Paolo Pescatore, a director at analyst CCS Insight, said: "We predict that Vodafone buys Sky next year.

"It would give the company access to the fast-growing pay TV market. They are a good fit strategically and Vodafone has the cash.

"It would be very complementary in the UK, Germany and Italy."

The move would be driven by demand from consumers for "quad-play" providers offering television, fixed-line, mobile and broadband in one bundle.

Sky is already reported to be in talks with Vodafone to hire some of its infrastructure, enabling it to provide mobile phone services.

The two firms declined to comment. Another source said: "Each move in the puzzle forces rivals to react.

"There's definitely the potential for Vodafone and Sky to happen. Vodafone is pretty keen to build up its offering."

Last week BT revealed that it is in exclusive talks to buy EE for £12.5 billion from owners France Telecom and Deutsche Telekom.

This would bring together fixed-line, mobile, broadband and TV services, supporting the trend towards communications giants offering their customers complete packages.

Pescatore said so-called "quad-play" services could be the beginning of a longer-term multi-play trend, in which bundles of telecoms, TV and internet could be broadened by the likes of car and home surveillance services.

"We are seeing a trend across Europe towards multi-play services. The UK has been behind in quad-play," he said.

BT's bid to acquire EE could spark a flurry of deals that could change the telecoms landscape in 2015. Analysts believe that O2, owned by Spain's Telefonica, would need to reflect on its position in the market.

One said: "It does not have cable or much fixed line. Is mobile enough if others offer triple-play or quad-play?" After Three's takeover of O2 in Ireland, the deal could be replicated in the UK, one analyst said.

"TalkTalk is small enough that it could easily be a target for a big player," the analyst added.

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