Sky subscribers hit 8.44m as revenues jump 10%

by Daniel Farey-Jones, Brand Republic 31-Jan-07, 09:00

LONDON - BSkyB added a net 183,000 customers in October-December 2006, taking its total number of subscribers to 8.44m, and declared quarterly revenues up 10% to £2.22bn.

There was impressive performance from newer products, with record growth in Sky+ boxes to 2.13m, in close to 2m households. The number of subscribers to the HD service launched last summer almost doubled to 184,000.

Sky Broadband had 193,000 activated customers as at December 31, and 20% of these were not previously with Sky.

Take-up of the new services helped Sky to its highest number of new customer additions for six years. However, the 432,000 additions were offset by the loss of 249,000 customers.

The company admitted its recent reduction in viewing package discounts had increased churn, now at 11.9%, still a bit off its target of 10%. It also warned it would slow subscriber growth over the next six months.

However, the reduction also increased average revenue per user by £9 from the previous quarter to £394.

According to James Murdoch, BSkyB chief executive, the company is on track for its targets, which include 10m subscribers by 2010. Murdoch also took a shot at NTL/Virgin after claiming that the rollout of Sky's broadband network coverage was progressing ahead of schedule. Sky Broadband is expected to break even in the year to June 30 2010.

"As a result, we now reach more households than the entire UK cable network with our 'See, Speak, Surf' combination of TV, telephony and broadband products."

Overall revenue was up by 10% year-on-year to £2.22bn, but post-tax profit was down 10% to £246m.

Ad revenue was flat year-on-year at £171m and Sky expects to outperform a contracting TV ad market in 2007.

Murdoch also used the announcement to confirm that reports suggesting he planned to leave the satellite television company and head to the US to work alongside his father were false.

He said: "I have no plans to go anywhere right now. The reports of last week were false, ie not true. I don't see what more I can say on the subject."

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