BSkyB saw the number of new subscriptions fall sharply in the past three months, it revealed yesterday, results that left the City feeling somewhat uneasy.
Only 40,000 subscribers signed up in the third quarter, compared with 95,000 for the same period a year ago. The figures are below what the market was expecting and represent the lowest quarterly growth since 2001.
Analysts at UBS called the results "slightly disappointing" and the shares dipped 12p to 529.5p. Churn - the percentage of customers who left - rose 0.8 points to 11.4 per cent.
Despite this, profits for the quarter reached £219m, up from £203m a year ago. Revenues rose 11 per cent to £1.06bn. BskyB last week secured the rights to three of the six Premier League football rights on offer for three seasons starting in 2007.
BSkyB will find out later this week if it has won two of the three remaining packages - the maximum it can secure under rules devised to expand competition.
It faces a tough bid battle with NTL, which may mount a serious attempt to grab the rights to show games at 4pm on Sunday, a time slot that is strongly associated with BSkyB.
BskyB is planning to introduce a broadband internet service in the summer, which it hopes will be a strong attraction to its 8 million television customers.
James Murdoch, the chief executive and son of Rupert, said price won't be the only issue that determines which broadband company gets most custom. "People want a brand they can trust. Service quality is an underestimated competitive tool. Some companies really struggle with that," he said. The broadband service should be available to 70 per cent of the UK population by June 2007.
BSkyB bought Easynet for £211m last year to gear up its assault on the internet market. It is also on schedule to unveil its high-definition (HD) TV service on 22 May, in time for coverage of England's cricket test matches. Merrill Lynch said in a note to clients that "the renewal of the Premiership rights represents a major risk for the stock". The bank still believes BSkyB shares are cheap, however, and sets a target price of 650p.Reuse content