BskyB is to acquire UK broadband and fixed line operations from the Spanish telecoms firm Telefonica.
According to the BBC, this will give Sky access to the 500,000 UK customers who use the O2 and BE brands for their home telephones and broadband.
The deal will make Sky the UK’s second biggest broadband provider and will see an initial payment of £180 million to Telefonica, followed by a further £20 million once the customer base has been switched to Sky.
Meanwhile, Telefonica says the deal will enable it to concentrate on the development of its mobile services, including the roll-out of 4G.
“Sky has been the UK's fastest-growing broadband and telephony provider since we entered the market six years ago,” said BskyB’s CEO Jeremy Darroch.
“The acquisition of Telefonica UK's consumer broadband and fixed-line telephony business will help us accelerate this growth.”