REUTERS/Dado Ruvic
Sky will likely go head to head with BT on quad play.
Sky says the move will allow it to launch its first mobile telephony services to customers in 2016, as it looks to expand its business and make headway in a new segment of the media market.
Crucially, this announcement means Sky will become a major player in the fight to bring quad-play packages to the UK. Quad-play is when companies offer bundled packages to customers: tying together phone lines, broadband, digital TV, and wireless carrier networks.
Telecoms giant BT - Sky's biggest competitor - is already well on the way, with plans to acquire EE steaming ahead. TalkTalk is also in on the action after buying Blinkbox Movies from Tesco, and Virgin Media is also making headway.
Sky's strategy is another clear indicator than the UK's telecoms/media market is being Americanised. The Murdoch enterprise is one of Europe's leading TV services, number 2 in the home broadband sector, and boasts millions of customers across the country.
Telefonica UK is known for partnerships and supports mobile virtual network operators (MVNP) - network services, but not full carriers (Vodafone etc.) - and already has links with Tesco Mobile. The company says it is committed to 98% 4G coverage by 2017.
Jeremy Darroch, Group Chief Executive, Sky says in a statement: "Through our partnership with Telefónica UK, we can build on our expertise in content, innovation and service to launch a range of exciting new services and exploit the opportunities for growth in the fast-changing mobile sector."
Ronan Dunne, CEO Telefónica UK, adds: "Sky understands the importance of a strong network and excellent customer experience and has made us a trusted partner to help deliver brilliant services. This will widen consumer choice still further and demonstrates the lively competitiveness of the UK market."