EE, the UK’s biggest mobile operator, is to become the latest media company to launch a set-top box in a bid to take on rivals including BSkyB andTalkTalk.
The box, which will be offered to customers for free as part of a broadband package, will offer a service that competes with YouView. YouView is run by a consortium including the BBC, ITV, BT, TalkTalk, Channel 4 and Channel 5.
In 2009, Orange, now part of EE, looked into buying the technology behind YouView’s predecessor Project Kangaroo after the venture was blocked by competition regulators.
EE has subsequently held talks about joining the YouView consortium, but no deal has ever materialised and instead the company has decided to launch its own service. It is expected to be free with an EE home broadband subscription and £9.95 per month for mobile-only customers, and will offer over 70 Freeview channels and a range of on-demand and catch-up services.
Deals are understood to have been struck with public service broadcasters including the BBC, ITV and Channel 5 but not, unsurprisingly, BSkyB which offers directly competitive services such as Now TV, with its own budget set-top box.
EE has joined the race to attract budget-conscious Freeview households that have an internet connection, of which there are about 12 million, and which BT and TalkTalk have targeted.
TalkTalk has been particularly successful with its model: its cheapest TV package is £8.50 with a free set-top box, quickly building a base of more than 1 million TV customers.
Like BT, which reinvigorated its TV offering by partnering with YouView and poaching prime sports deals such as rights for Premier League and Champions League football, the goal is to secure customers looking for an enhanced amount of services and content from one provider.
BSkyB, under threat from UK rivals and US firms such as Netflix and Amazon, has targeted cheaper customers looking to “dip” into pay-TV with cheaper options it offers through its Now TV offering.
EE is aiming to capitalise on the explosion of video use on smartphones and tablets. The arrival of fast 4G services has seen more than 50% of its fast internet capacity taken up by video usage.
The new service is expected to allow users to watch TV programmes on up to three devices for one subscription, as well as via the set-top box on a television.
EE’s move follows a flurry of activity by major media owners to control content and viewing, including a bid by Rupert Murdoch’s 21st Century Fox for Time Warner.
Fox is also looking to merge its production division Shine, maker of shows including MasterChef, with Big Brother maker Endemol and the company behind American Idol.
• This article was amended on 8 October 2014 to remove a reference to Netflix in the first paragraph
