UK pay-TV company Sky posted their latest figures today which revealed a 10 per cent increase in full year revenues, partly due to their phenomenal success of their broadband package.
The company, which revealed earlier in the month that they were the fastest growing broadband provider in the country, saw their revenue increase by 10 per cent to 4.6 billion pounds, which was in line with their forecasts.
Chief Executive James Murdoch said about the report "This year has been one of enormous importance and change for us, with the launch of our broadband and talk services transforming our business and our future prospects fundamentally."
BSkyB entered the extremely competitive broadband market just under a year ago and have caused shockwaves in the market place as they have expanded rapidly and are now starting to become a dominant force. Sky launched their broadband service to increase customer loyalty and to offer new services for customers, such as video-on-demand.
Although Sky’s operating profit dropped by £62 million, the company has no intention to reduce its spending on broadband, which is forecast to be £400 million over three years. Their success so far is unprecedented. On June 11th Sky announced 259,000 new customers in the three months to June 30, taking its total broadband customers to 716,000.
To put this growth into perspective, BT, the leading broadband provider in the country, announced their results yesterday, revealing they had achieved 175,000 new additions in that quarter.
If this is the case then Sky signed around 50 per cent of the new additions to the market (bear in mind DSL does not include Virgin Media who are classed as a cable operator).
James Murdoch also told reporters that there were no developments on the Virgin Media row over carriage fees, which led to the Sky channels being removed from Virgin Media’s platform. Sky are expected to lose £15 million of their operating profit in the next quarter because of this, unless the problem is resolved.