BSkyB is to pay £180 million for Telefonica’s UK broadband business, taking control of services used by half a million O2 and BE home line and broadband customers. Another £20 million will be paid after the completion of the customers switch to Sky.

The purchase comes as Sky seeks to become the second largest broadband provider in the UK, competing against Virgin Media.

BSkyB chief executive Jeremy Darroch said of the deal, "The acquisition of Telefonica UK's consumer broadband and fixed-line telephony business will help us accelerate".

Telefonica has sold the broadband business as it seeks to focus on expanding its 4G offering.

The deal is expected to be completed by April if it receives approval from regulators.

Liberty Global to make bid for Virgin Media reigniting old rivalries with Sky