News Corp’s BSkyB Buying The Cloud WiFi Network?

Sky and The Cloud logos

If you thought that News Corp.’s UK satcaster BSkyB (NYSE: BSY) had exited the networks business when it sold Easynet last year, think again.

The Sunday Times reports the telco and TV company will buy UK public WiFi network The Cloud.

We have asked BSkyB for comment. The company is due to report earnings Thursday, so an announcement – if the reported deal is happening – could come later this week.

Such a deal would be an excellent move for Sky as regards multimedia customer retention and acquisition – Sky would offer its 2.8 million fixed-line broadband customers out-of-home broadband on The Cloud’s pay-to-acces network.

This is something rival BT (NYSE: BT) already does. The Cloud has a network of 22,000 European hotspots, which includes cafes, bars and restaurants around Britain.

But there are also big opportunities for content. Sunday Times: “Sky already offers its subscribers sport and news content on their mobiles but this deal promises to improve the service.”

This, of course, is a different proposition for Sky to Easynet – the pioneering UK ISP which Sky used to build its own consumer broadband network and which Sky off-loaded after it consequentially was left focusing on corporate networks.

The mobile internet over smartphones is now taking off in the mainstream, but GSM operators are struggling to meet demand and, particularly with new devices like tablets appearing alongside phones, there seems ample room for a WiFi network of scale like The Cloud.

That Sky, and not any of the GSM networks, is buying The Cloud is noteworthy.

It would be interesting to see what part The Cloud might play in Sky’s content strategy, and perhaps that of its parent News Corp (NSDQ: NWS). In the past, online media operators like MySpace and the BBC have subsidised The Cloud to serve their websites for free, despite The Cloud’s hourly access charges.

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