BT seals deal with Sky to show Premier League football

BT is pushing ahead with plans to bring Premier League football to its customers after signing a wholesale deal with BSkyB for Sky Sports 1 and 2. Yet the telecoms giant is still keeping its pricing plans under wraps.

BT announced yesterday it had signed the contract three months after Ofcom, the media watchdog, demanded Sky slash the prices it charged rivals to show premium sport.

The move will allow BT customers to sign up from the beginning of August, a fortnight before the start of the Premier League season. Gavin Patterson, the chief executive of BT's retail arm, said he was delighted by the agreement. "We know our customers will be keen to sign up for the two channels."

Earlier this year, the group said it would offer Sky's sports content for as little as £15 a month. Insiders at its rivals suggested the decision not to announce prices yesterday signalled that the group "may have rowed back from that position".

Sources close to BT said the pricing would be announced this week and the package of Sports 1 and 2 as well as rival sports channel ESPN, would be available for less than £20 a month.

Ofcom ruled in March that Sky would have to cut its wholesale prices following lobbying from BT, Virgin Media, Top Up TV and Setanta Sports to break the group's grip on premium sports and movies. This followed a three-year investigation into the pay-TV market.

While Sky was furious over the regulator's intervention, its rivals were not delighted either, saying the remedies should have gone further.

Sky has lodged an appeal, but also agreed a compromise that would allow its rivals to show sport in the meantime. Currently, any platform wanting to show Sky Sports channels will still have to pay the full wholesale price. The difference with the prices set out by Ofcom will be put into escrow, pending the outcome of Sky's appeal. If the appeal fails, the companies will have the difference returned.

BT insiders admitted earlier this year that the decision to wholesale sports content is, in effect, a multimillion pound bet on Sky's failure to overturn the ruling by Ofcom.

At the moment, Virgin Media is the only company to wholesale Sky's sports content. Following Ofcom's announcement it revealed it was to cut the prices it charges.

Customers that take Virgin's basic TV package with all the Sky Sports channels and ESPN have had their monthly bill reduced from £43.50 to £40. Sky's basic package, plus all the sports channels and ESPN, is currently £45 a month. Rivals said the broadcaster was likely to come under pressure to cut costs.

Sky yesterday sweetened its sports package by offering subscribers free access to Sky Mobile TV and the online TV service Sky Player until the end of the year.

This will enable customers to watch sport on devices from their televisions, to smartphones, personal computers to the iPad and iPod Touch for free. Sky Mobile TV usually costs subscribers an additional £6 a month, while Sky Player us available with additional services such as Multiroom.

One source close to the group said the timing of the release on the same day as BT's was "coincidental".

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