BSkyB weighs early retirement for analogue signal as digital booms

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The Independent Online

BSkyB is considering advancing the switch-off date for its analogue satellite signal to the third quarter of next year and could announce the plan when it presents full-year results next week. It is likely that BSkyB, which is 37.5 per cent owned by Rupert Murdoch's News Corp, would give subscribers a 12-month transition period to adopt digital services. That could see analogue broadcasts cease by August 2001, 17 months earlier than planned.

BSkyB is considering advancing the switch-off date for its analogue satellite signal to the third quarter of next year and could announce the plan when it presents full-year results next week. It is likely that BSkyB, which is 37.5 per cent owned by Rupert Murdoch's News Corp, would give subscribers a 12-month transition period to adopt digital services. That could see analogue broadcasts cease by August 2001, 17 months earlier than planned.

A source at BSkyB said: "It's an opportunity to do it," commenting on whether an analogue switch-off date will be revealed next week. The results are expected to show that BSkyB has attracted about 3.65 million digital subscribers out of a total direct-to-home (DTH) base of 4.5 million. The rapid migration of subscribers to digital comes at a cost with Investec Henderson Crosthwaite analyst Mathew Horsman forecasting a full-year loss of £113m before exceptional charges.

Consideration of the move to exclusive digital DTH delivery came as BSkyB finalised a £525m all-share deal to raise its stake in Open, its interactive services arm, to 80.1 per cent from 32.5 per cent. The transaction values Open at £1.2bn.

BSkyB agreed to acquire the 20 per cent stake held by HSBC for £225m in stock and the 15 per cent held by Matsushita for £169m in stock. A further £131m of new BSkyB stock will be payable on a proportionate basis if certain targets are met. Open's other shareholder, British Telecom, will dilute its 32.5 per cent interest to 19.9 per cent. That leaves BSkyB responsible for injecting an estimated £250m into Open until it breaks even. BSkyB shares closed up 23p at 1313p.

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