Easynet Broadband

Easynet was an unusual ISP (internet service provider). It was founded in 1994, the same year that the internet was becoming a commercial reality in the UK, and by the time Sky bought it in 2006 it had spent over a decade building one of the country's most significant independent network infrastructures. Easynet was primarily a business-focused provider, but it also owned UK Online, a consumer ISP that served residential customers alongside the business division. Sky bought Easynet not for its consumer business but for something more specific: its LLU (local loop unbundling; equipment installed by Easynet directly inside BT's telephone exchanges) infrastructure, which gave Sky the network it needed to launch its own broadband service.

Foundation and early years

Easynet was founded on 1 August 1994 by David Rowe and Keith Teare, with offices above what would later become Cyberia, the UK's first internet cafe, in London's Whitfield Street. Easynet supplied Cyberia's internet access. The company floated on AIM (the Alternative Investment Market, a junior section of the London Stock Exchange for smaller companies) in March 1996, raising £2.6 million. In a sign of the times, the share price had fallen to less than 40 pence within six months of the float, from a listing price of 100 pence, reflecting the difficult conditions for technology companies at the time.

Easynet's most significant technical achievement came in January 2001, when it became the first company in mainland Britain to unbundle a local loop from BT's network. LLU meant installing Easynet's own equipment inside a BT telephone exchange, cutting out BT Wholesale's pricing and allowing Easynet to deliver broadband directly over the copper phone line. This gave Easynet an infrastructure advantage and positioned it as one of the two UK companies most invested in LLU at the time. In 2004 Easynet took that further, challenging BT in the wholesale market with its 8Mbps LLUStream service, one of the first offerings at that speed.

Easynet's consumer offer: UK Online

Easynet's direct consumer broadband presence came largely through UK Online, a residential ISP it had acquired in 1996. UK Online launched a consumer broadband service in November 2004, offering a 1Mbps package at first and quickly following with one of the first consumer 8Mbps services, priced at £39.99 a month. The speed attracted attention; at a time when most ADSL broadband was capped at lower speeds, 8Mbps was a genuine step up. The service was only available in areas where Easynet had unbundled the local exchange, which limited its geographic reach.

Easynet itself focused primarily on business customers, providing managed network services, hosting and connectivity to organisations rather than to households. Its business broadband products were more technically demanding and priced accordingly, targeting companies that needed reliability guarantees and bespoke configurations rather than households that wanted a simple monthly package.

Sky's acquisition and what happened next

In October 2005, Sky agreed to buy Easynet for £211 million. The acquisition was specifically motivated by Easynet's LLU infrastructure. Sky wanted to launch its own home broadband service; to do so competitively it needed to own equipment inside telephone exchanges rather than simply reselling BT Wholesale's product. Easynet gave Sky access to 232 unbundled exchanges at the point of acquisition, with an existing LLU footprint that Sky could expand. Sky launched its broadband service in July 2006 using the infrastructure it had bought.

Under Sky's ownership, UK Online continued briefly as a separate entity before Sky closed it in November 2010, giving customers little more than a month's notice. Many UK Online customers had been small businesses attracted by technical features, and they were offered either a MAC code (a number used to switch broadband provider without losing service) to move elsewhere or a discounted period on Sky Broadband. The transition was criticised because Sky Broadband was a residential product and lacked some of the features, such as fastpath and static IPs, that UK Online had offered.

Easynet's business services division was handled differently. In 2010, Sky sold the Easynet brand and its remaining business customer base to Lloyds Development Capital (LDC), the private equity arm of Lloyds Banking Group. That business went on to be sold to MDNX in 2013, then to Interoute in 2015 for £402 million, and Interoute was subsequently acquired by GTT Communications for $2.3 billion in 2018. The Easynet name continues today as a business network services provider, wholly separate from any consumer broadband activity.

In summary

Easynet's consumer broadband chapter was relatively brief and operated largely through its UK Online subsidiary. Its lasting contribution to the UK market was infrastructural: its early and substantial investment in LLU gave Sky the platform from which to launch a broadband service that would grow to millions of customers. Without Easynet's network, Sky's entry into broadband would have been delayed or more expensive. The company's own consumer brand is now forgotten, but its technical legacy underpins one of the UK's largest providers.