TalkTalk teams up with Sky to bring superfast broadband to York

By Paul Sandle

LONDON, April 15 (Reuters) - British broadband rivals TalkTalk and BSkyB are building their own fibre network in York that will deliver the fastest broadband speeds available by sidestepping the BT network they rely on elsewhere.

The two companies are joining up with AIM-listed CityFibre , which has already installed a fibre infrastructure in the city in northern England, to start the service next year, they said on Tuesday.

"We are going to deliver a pure fibre network that will deliver speeds of 1 Gig per second (1,000 Mb) direct to homes and businesses in York independent of BT Openreach infrastructure," TalkTalk's Chief Executive Dido Harding said.

The network will have superfast connections to tens of thousands of homes and businesses, she said, bettering BT's service, which uses copper wires for the last few metres.

One connection would allow 200 people to watch different high-definition videos at the same time without buffering, she said.

"One Gig is basically unlimited bandwidth whereas with fibre to the cabinet and copper wire to the home or business, all you can commit to is up to 76 Mb," she said on Tuesday.

BT also offers its retail customers a full fibre-to-the-home product that has speeds of 300 Mb in some areas, and Virgin Media offers speeds of up to 152 Mb on its own network.

TalktTalk and Sky will each have a one-third stake in the new venture, and they plan to build similar networks in two more cities, Harding said, with the choice decided by a competition.

"The economics of building a fibre to the premises network are quite final balanced," she said. "We will be looking to work with cities that are enthusiastic."

TalkTalk, with four million customers, has to date relied on BT's fibre network for superfast broadband, and it has complained that BT abuses its position by squeezing the gap between its wholesale price and its retail prices.

Regulator Ofcom is investigating the claim. BT has said there is no case to answer

Harding said charges for its product in York, which will be sold independently of Sky's offer, would be set in due course. "TalkTalk never does anything in the middle of the pack, we always look to offer our customers extraordinary value, and this will be no different," she said.

TalkTalk customers had baulked at paying an additional 10 pounds to 15 pounds a month extra for fibre to cabinet, she said. "We think we can offer a much better product at a much better price."

Ofcom said on Tuesday that one in four residential broadband connections was now "superfast", which it defines as 30 Mb or faster, up from 5 percent in November 2011. (Editing by Jane Merriman)