UK satellite broadcaster BSkyB is considering raising up to a billion pounds in a bond issue, with reports that it could be used to buy into the broadband market.

BSkyB is not making any comment on the use for the funds, which it says are for “general corporate purposes,” but a spokesman confirmed “we plan to continue to set the pace of change in media and distribution, including initiatives such as our broadband content portal, our mobile offering and our high definition television offering.”

A report in the Guardian newspaper suggests that the company could use the money to buy into broadband, possibly by acquiring a broadband service provider, enabling it to offer a ‘triple-play’ of video, voice and data services.

The report speculates that potential acquisition targets could include Homechoice, which provides a broadband television service in the London area and is looking to roll out a national service. Other broadband suppliers such as Easynet and Pipex are also cited as possible targets. Sky is said to be planning to invest in installing its own equipment in telephone exchanges, a process known as local loop unbundling.

Sky had previously made an offer of over £1 billion for Flextech, the programming division of Telewest, although the company is apparently no longer for sale following the announced plans for a merger of Telewest with NTL.

With the possibility of greater competition from a single cable company, and BT planning to offer its own video-on-demand service, Sky must certainly be considering its options. Broadband provides the ability to offer true video-on-demand, integrated telephony, high-speed internet access, enhanced interactive services, and the opportunity to extend its service to homes without satellite dishes.

The forthcoming high-definition set-top box that Sky will launch next year is expected to come equipped with a network connection.