BSkyB still plans 200 channels

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The Independent Online
BSkyB is pressing ahead with plans to launch a 200-channel digital satellite service later this year despite its unexpected alliance with the rival broadcasters Carlton and Granada in a bid to run a smaller 30- channel digital terrestrial service from the summer of 1998.

Confirming its plans, Sam Chisholm, chief executive, said the company was poised to issue orders for up to a million set-top decoder boxes for the planned service.

The satellite broadcaster also said it was proceeding with plans to take a stake in Germany's leading pay-TV group, Premiere, despite concerns that a deal would be blocked by that country's competition authorities. BSkyB would join forces in the venture with Germany's Bertelsmann and Kirchgrupp and France's Canal Plus.

Striking a deal with Premiere's current owners, however, looks likely to be frowned on by the Federal Cartel Office, which said yesterday it would view "critically" any attempt by BSkyB to take a stake. A spokeswoman said: "We have not said that we would not approve it, but we would view it critically because of the potential damage to competition."

Commenting on record half- year profits, Mr Chisholm said: "Subscribers are switching on to Sky in record numbers and we are now in more than 6 million homes. BSkyB is now well positioned to capitalise on the introduction of digital television."

The market welcomed Mr Chisholm's bullish assessment of BSkyB's prospects yesterday, with the shares closing 30p higher at 623p. At that level they have reversed much of a 200p slump before Christmas when concerns drove the shares down from a high of 696.5p.

Pre-tax profits of pounds 134m in the six months to December were 26 per cent better than in the second half of 1995 and in line with expectations. Profits were driven by record subscriber growth of 434,000 in the final three months of 1996, a 32 per cent rise in advertising revenue and lower numbers of subscribers cancelling their contracts.

Investment column, page 22