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LONDON (Alliance News) - British Sky Broadband PLC and TalkTalk Telecom Group PLC said Tuesday that they had partnered with CityFibre Infrastructure Holdings PLC in a joint venture to establish a new broadband services in the city of York, with the aim of building competing infrastructure to BT PLC's Openreach.
The companies will build a city-wide fibre-to-the-premise network to deliver broadband connections which it says will deliver speeds of one gigabit to homes and businesses.
The network will build on CityFibre's existing fibre infrastructure in place in York, working with Japanese information technology equipment company Fujitsu. When it is completed BSkyB and TalkTalk will sell competing services over the new infrastructure.
The first customers are expected to be connected on the new network in 2015.
The joint venture will also allow the companies to test their method of building a viable pure fibre network that is independent from BT's Openreach infrastructure, the companies said. Openreach is BT's infrastructure division, which was established in 2006 following an agreement with telecoms regulator OFCOM to allow rival telecom operators to access BT's network.
Beyond York, the companies also plan to bring a similar service to two further cities.
"Increased competition in the broadband market has brought benefits to millions of households who now enjoy better quality and value of service," said Managing Director of BSkyB's sales, marketing and brand group Stephen van Rooyen in a statement.
"Sky has led the growth of the sector since the launch of Sky Broadband, becoming the UK's favourite provider of TV, broadband and home phone, and we see plenty of opportunity to continue to develop our offering," van Rooyen added.
Sky, TalkTalk and CityFibre will be equal shareholders in the new company, each having a 33.3% stake.
Ahead of the market open Tuesday, BSkyB last traded at 873.55 pence. Shares in TalkTalk last traded at 288.10 pence. Shares in CityFibre last traded at 69.00 pence.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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