BSkyB gives loyal customers discount

BY A CORRESPONDENT

13 July, 2007:

BSkyB is rewarding its loyal customers: the satellite broadcaster is discounting its high-definition television service in the United Kingdom for anyone who has been with it for at least two years.

Sky’s first discount, starting later in 2007, will see about £100 off the price of its high-definition TV box – which costs £299 – for customers who have been signed up for longer than two years.

Sky has announced that it has got 90,000 new television customers over the last three months.

The company – currently the subject of an inquiry by the Competition Commission of the United Kingdom into its 17.9% stake in ITV – now has 8.58 million customers and is forecasting 10 million customers by 2010.

The company has benefited from the removal of its basic channels, including Sky One, from households with cable facility, after a public spat with Virgin Media. Customers have switched over to satellite TV to catch shows such as Lost and Battlestar Galactica that are no longer available through cable.

Meanwhile, James Murdoch, chief executive of Sky, said a change of management at Virgin Media could herald a new deal between the rivals.

James Murdoch refused to divulge as to how many customers BSkyB has gained from Virgin Media, with which the group has been locked in a dispute much of 2007, following the failure to agree to terms for Virgin Media to carry Sky’s basic channels on its platform. As a result, popular programmes like Lost and 24 have not been screened by Virgin Media since March 2007.

Sir Richard Branson’s Virgin Group is the largest shareholder in Virgin Media with a 10.5% stake, while BSkyB is 39% owned by Rupert Murdoch’s News Corporation.

Sky’s home telephone service and broadband offering, launched in 2006, have been grabbing customers from rivals such as BT. At the end of June 2007, Sky had 716,000 broadband customers and 526,000 telephone customers.

At present, these customers still have to pay BT £11 a month line rental, but Sky is planning to launch its own line rental product later in 2007. Sky will charge less than BT for line rental, subsidising the service, which could result in BT’s customers cutting the remaining ties with the company.