Sky Brasil is undergoing a major overhaul, shifting its focus from pay-TV to broadband. This strategic move comes as the country’s pay-TV market shrinks, with subscriber numbers dropping steadily.

“We’re transitioning to become a connectivity and streaming service provider,” Sky Brasil’s president, Gustavo Fonseca, told local daily Valor Economico. He predicts that, within five years, broadband revenue will surpass pay-TV revenue for the company.

Brazil’s pay-TV market has lost over 4 million subscribers since 2020, and Sky Brasil, despite being the second-largest provider, has seen its base shrink to 3.2 million. While Fonseca doesn’t foresee pay-TV disappearing entirely, he acknowledges its irreversible decline and a future catering to a much smaller audience.

To adapt, Sky Brasil has launched its own streaming platform, Sky+, which combines live TV channels with partnerships from streaming giants like Paramount+, HBO Max, Star+, and Disney+. Sky+ offers viewers flexibility in consuming content, allowing them to watch on TVs or mobile devices. While successful, Sky+ hasn’t fully offset the pay-TV subscriber losses.

This prompted Sky’s entry into the broadband market in 2022 with its Sky Fibra brand. Currently available in 195 cities, the goal is to reach 300 by year-end. Although the customer base sits at a modest 48,000, there’s significant growth potential.

Sky’s broadband strategy hinges on using existing fibre optic networks from third-party providers like Fibrasil, American Tower, I-Systems, and V.tal. This eliminates the need for hefty upfront infrastructure investments.

Further reflecting this business transformation, Sky has petitioned the National Telecommunications Agency (Anatel) to be considered a small player in the broadband market, which would grant them tax benefits similar to regional internet providers.

The next big play for Sky Fibra’s growth could be the acquisition of Oi Fibra’s assets, which are being divided and sold regionally. While Sky remains tight-lipped on the matter, they’re reportedly among the contenders vying for these assets.