Sky dismisses rising churn rate

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The Independent Online

BSkyB chief executive James Murdoch yesterday shrugged off a sharp rise in the number of customers leaving his pay TV platform.

Sky said the rate of this "churn" had increased to 11.9 per cent - well ahead of analysts predictions of 11 per cent. However, Mr Murdoch was confident of meeting Sky's bid to achieve 10 million customers in four years.

He blamed a strategy of cutting discounts for customers who called customer service agents threatening to leave for the increase in churn. This, he said, accounted for 27,000 customers leaving and the churn rate would have been down at 10.6 per cent if they were excluded.

"We have decided to stop rewarding what you could say was bad behaviour by customers and instead reward good behaviour." The Sky boss said he was "very confident" that the raid on ITV's shares last year, which saw Sky taking an 18.3 per cent stake in its rival, was "the right thing to do for our business".

He did not think there were "grounds" for regulators to intervene and force Sky to unwind its move.

Despite the increase in churn, Sky said it added a net 183,000 customers in the three months to 31 December, bringing the total to 8.4 million.