BSkyB’s subscriber growth rate sees a fall

BSkyB’s subscriber growth rate sees a fall

	Published : Sat, 05 Nov 2005 07:05 By : Amy Watts Print this Story

Shares dropped by 32 pence this morning in British Sky Broadcasting Group (BSkyB) PLC after the satellite pay TV company cautioned about the possibility of a large number of customers defecting to other operators.

BSkyB, whose stock was at 495 pence at 9:50 a.m., admitted that almost an eighth of its customers shifted to other digital or pay-TV platforms during the first fiscal.

Paul Richards, a media analyst at Numis Securities, summed it up when he said: “The results were a bit of a mixed bag. The financials were strong but what's really worrying people is the spike in the churn rate.”

BSkyB, which is 37 per cent owned by Rupert Murdoch's News Corp, said it added 57,000 subscribers in the quarter up to September 30. It has now 7.8 million customers in all. This was said to be amid keen competition from Freeview and a period of economic downturn. Chief Executive James Murdoch, Rupert's youngest son said: “It's cable competitors, it's Freeview, and customers have a lot of choices.”

Sky’s addition of customers in the three months between July and September was down from 62,000 achieved in the same quarter last year. It is also the lowest net addition in a quarterly since four years ago.

Optimism, however, abounds among the analysts who expect Sky to cross the 8 million mark in the pre-Christmas period.

Sky said: “The number of households with "multiroom" - Sky services in more than one room - increased by 103,000 in the quarter to 748,000.”

James Murdoch also announced that the company remained on track for its targets for 2005 and 2010- by which time its goal is to have 10 million customers.

Its revenues rose by 8% to £1.02 billion and pre-tax profits were up 14% from a year earlier to £200 million.

James Murdoch declined to make any comments to journalists when he was asked about the investor unrest.