Sky Mobile will offer flexible monthly payment plans and the ability to roll over unused data each month for up to three years.
Sky will become a "quad play" provider, offering broadband, television fixed-line telephone and a mobile service.
And existing Sky TV customers will not have to pay for calls or texts and can compile playlists of their favourite shows to watch on their mobiles.
According to Sky, some 46,000 have pre-registered for the service.
The service comes with three data plans:
Non-Sky TV customers can add on unlimited calls and texts for £10 per month, or pay for calls and texts on a pay-as-you-use (PAYU) basis.
According to Sky, UK consumers use less than half of the mobile data they buy from mobile network operators, adding up to an annual £2bn of wasted data.
Stephen van Rooyen, UK and Ireland Sky chief executive, said:  "We felt it was time to shake up the mobile market and give customers a completely new way to manage their mobile plan.
"We've designed it based on what people told us they want - it's easy, flexible and transparent and it puts the customer in control."
Ewan Taylor-Gibson, a telecoms expert at uSwitch said: "Sky's first mobile offering is very competitive, as long as you're already a Sky TV customer."
He compared Sky's Sim-only deal with that already offered by giffgaff, another service that piggybacks on O2's network and allows customers to alter their package depending on their usage.
"The key differences between the two are that Sky ties you in for 12 months, while giffgaff users can cancel anytime, and giffgaff also offers unlimited everything for £20 a month, beating Sky's top package, which delivers 5GB," said Mr Taylor-Gibson.
Sky's decision to let people roll over data and store it for three years was "both unique and compelling", he said, but it may have to offer bigger data bundles.

Diamond, 47, says some internationals could join Sale at the AJ Bell Stadium in time for next season.
"We're in talks with four or five international players to join us," he told BBC Radio Manchester.
"We're well on the way to bringing some real experienced quality players to the club next year."
Diamond said there is no urgency to bring in players and that he was happy with the way the club plans to bring in recruitments.
"I don't need to rush into signing players. We've got a good protocol with how we find our players and it's not let us down yet in five years," he said.
"There's offers gone and there's offers been accepted, we've just got to tie the details up.
"There's one or two people who have decided to come to Sale for less money than they're being offered.
"They've got mates who are here and they've asked the question. How do they run it? What's it like?
"One or two of these are leaving big clubs to come here which will be a statement when we announce them."

Duffy, 26, raced into a 3-0 lead and beat the world number nine easily.
A furious Ding criticised the playing conditions at the York Barbican.
Sheffield's Duffy, who is seeded 121 for the event, said: "I was confident going into the match because I have been working harder than I ever have before, but it's crazy. I am buzzing."
Ding's news conference lasted less than a minute and was littered with swear words.
The Chinese star complained about the table set-up and conditions and will be lucky to escape a fine from World Snooker for his rant.
Three-time UK Championship winner John Higgins had no problems coming through his first-round match.
The 40-year-old Scot, who has already won two ranking events this season, continued his impressive form with a routine 6-1 victory over Leo Fernandez.
Higgins is joined in the second round by three-time runner-up Ken Doherty, Mark Davis, Antony McGill and Sydney Wilson, who came from 4-2 and 5-4 down to stun Welshman Michael White in a thrilling final-frame decider.
Doherty, 46, thumped fellow veteran Tony Drago 6-0, world number 20 Davis beat Rhys Clark 6-1, while Scotland's McGill scored three centuries in a 6-3 victory over James Cahill.
Broadcaster Sky is launching its own mobile phone service.
[NEXT_CONCEPT]
Sale Sharks director of rugby Steve Diamond says the club will not rush into making signings and insists they will bring in "quality" talent.
[NEXT_CONCEPT]
Amateur Adam Duffy pulled off one of the biggest upsets in UK Championship history with a stunning 6-2 win over two-time winner Ding Junhui.