BT locks horns with Sky over pricing for sports

BT ratcheted up the battle for pay TV viewers as it yesterday unveiled aggressive prices to offer customers Sky's premier sports channels. The move prompted a war of words between the two rivals.

The telecoms giant will charge customers of BT Vision £16.99 a month for Sky Sports 1 and 2, with ESPN also bundled in, while a pared-down package goes as low as £6.99 a month.

Gavin Patterson, the chief executive of BT Retail, said: "We expect that entry prices as low as £6.99 will welcome in a huge number of extra customers who'd love to enjoy these channels, but thought they were too expensive."

Rivals said that to take advantage of the deal customers will have to sign up to a two-year broadband contract at £17.99 a month and pay telephone line rental, bringing it closer in line with Sky and Virgin's pricing levels.

Sky was furious about BT's new pricing model. Mike Darcey, Sky's chief operating officer, said: "BT has spent three years persuading Ofcom that it needs a wholesale price cut in order to compete in pay TV." He continued: "It is now clear that Ofcom has been duped and that BT wants to set retail prices below wholesale prices. Their agenda is all about using artificially cheap TV to sell expensive broadband and phone services. This is not price competition, it is cross subsidy."

John Petter, consumer managing director at BT, hit back, saying Sky had been using BT's infrastructure to sell cheap broadband, in a style that "didn't feel too different" to its strategy over selling sports content.

Mr Petter believes the sports package will be a "significant" driver to boost its 467,000 customers. Almost 10 million households have Sky.

BT believes there is a huge market to play for after it carried out research that found four million homes were interested in Sky Sports content but currently found it too expensive. It also hopes the lower prices will tempt Sky customers to defect.

Toby Syfret of Enders Analysis said the sports packages would be crucial in preventing BT's customers leaving for Sky or Virgin, which also shows Sky Sports content. "There has been a lot of drift from BT to Sky; this will help head it off."

He added that when broadband and telephone line prices were factored in, there was not a huge difference in price between the rival pay TV providers.

The packages were made available yesterday, allowing households to sign up before the new football season.

The news came after it emerged that Sky had lifted its pricing more than expected. Increasing the price for its retail customers also brings wholesale prices up, putting more pressure on BT's pricing offer. BT said it was caught by surprise when Sky raised its prices, but added "it doesn't change our plans. We are in this for the long term. We're surprised they raised prices despite the extra element of price-based competition". Mr Syfret said: "This is just one of a number of aggressive actions Sky has taken to stall the competition."

He added that given the extra costs of adding an extra package of Premier League matches, it was not a surprise the company raised prices.

The price war was kicked off by the media regulator, Ofcom, in March, when it ruled that Sky should reduce its wholesale prices for rival pay TV providers to access premium sport and movies. Sky is contesting the decision with the Competition Appeal Tribunal. As part of the process, BT is fighting to reduce the wholesale price further. Ofcom said: "Our decisions will therefore deliver competition, choice and innovation in the pay TV market, regardless of changes to Sky's retail prices."

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Content Writer - Global Financial Services

£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Web Developer - PHP

£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Loan Underwriter

£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory
Ashes 2015: Alastair Cook not the only one to be caught in The Oval mindwarp

Cook not the only one to be caught in The Oval mindwarp

Aussie skipper Michael Clarke was lured into believing that what we witnessed at Edgbaston and Trent Bridge would continue in London, says Kevin Garside
Can Rafael Benitez get the best out of Gareth Bale at Real Madrid?

Can Benitez get the best out of Bale?

Back at the club he watched as a boy, the pressure is on Benitez to find a winning blend from Real's multiple talents. As La Liga begins, Pete Jenson asks if it will be enough to stop Barcelona
Athletics World Championships 2015: Beijing witnesses new stage in the Jessica Ennis-Hill and Katarina Johnson-Thompson heptathlon rivalry

Beijing witnesses new stage in the Jess and Kat rivalry

The last time the two British heptathletes competed, Ennis-Hill was on the way to Olympic gold and Johnson-Thompson was just a promising teenager. But a lot has happened in the following three years
Jeremy Corbyn: Joining a shrewd operator desperate for power as he visits the North East

Jeremy Corbyn interview: A shrewd operator desperate for power

His radical anti-austerity agenda has caught the imagination of the left and politically disaffected and set a staid Labour leadership election alight
Isis executes Palmyra antiquities chief: Defender of ancient city's past was killed for protecting its future

Isis executes Palmyra antiquities chief

Robert Fisk on the defender of the ancient city's past who was killed for protecting its future