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Sky to up subscription prices in attempt to meet targets

LONDON - Sky is to raise subscription prices for the second time this year, with new charges due to come in this September as it looks to hit new customer revenue targets.

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The broadcaster is increasing the rates with an eye to hitting an average revenue per user of £400 annually by the end of next year. It will be the second time this year that some of its subscribers will have faced an increase in rates.

Premium-package subscribers face a £1 increase from £40 to £41, but people who have less expensive packages will pay an extra 50p a month. According to reports, the hike will mean an extra £50m in revenue each year for Sky.

The price rise plans follow the news earlier this month that BSkyB is launch a free-to-air digital satellite service, providing up to 200 channels, to counter the threat from the Freeview service.

The move is part of a plan to further cement Sky's increasing presence in the UK television market. The move also marks an end to Sky's policy of only offering a premium pay-TV service and will further increase its revenues, which already see it outstrip rival ITV.

The service, dubbed "free sat", will be available for a one-off charge of £150 for a connection package.

The hope is that these new "free sat" customers can be converted to pay-TV packages and ultimately increase Sky's average revenue per customer targets.

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