Sky gets broadband boost in £49m Virgin Media fibre deal

Sky broadband is getting a serious capacity boost, thanks to -- of all people -- Virgin Media. Sky's capacity to handle Internet traffic will increase in the next five years in the multimillion-pound deal.

The £49 million deal between BSkyB and Virgin Media's business arm links Virgin's speedy fibre optic network with Sky's own broadband network and unbundled local exchanges. Although the work will last five years, the aim is to get a core network connected before the end of this year.

It seems a few million quid can make even rivals lend each other a helping hand. Sky and Virgin Media are both providers of paid TV as well as broadband and other services, but in a business sense are interdependent. As well as using a rival's infrastructure, they share channels too.

Sky could do with a bit of a boost in the broadband department. An influx of customers having the temerity to actually surf the Internet when they bought a broadband deal recently caused serious slowdown on the Sky network.

Sky also faces extra strain from the arrival of customers of O2 and Be Broadband, which Sky bought earlier this year.

And there's no sign of people using less Internet: Sky revealed that on-demand viewing has more than quadrupled in the last year, with instant classic Bond film Skyfall leading the charge in Sky's monopoly on movies.

Are you a Sky or Virgin Media customer? How do you decide between the two -- or is Freeview all you need? Tell me your thoughts in the comments or on our Facebook wall.

Update: This article originally referred to to increased speeds for customers, but Sky has clarified the deal will increase backhaul capacity and won't necessarily affect speeds.