Strong Sky results increases pressure on News Corp

BSkyB has reported another set of strong results for the first quarter, with over a quarter of its customers now taking triple-play services and almost four million subscribing to HD services. The pay TV operator increased underlying profits by 24% to £790 million (€890 million) for the nine months ending March, putting more pressure on News Corp to pay more for Sky than it had intended.

Net DTH additions for the three months ending March 31 were 51,000, taking Sky’s total customer base to 10.147 million. The operator ended the quarter with 3.7 million HD customers, an increase of 43% during a 12-month period. ARPU increased 8% to £544 per annum.

Sky has also seen success in communications, with 543,000 net additions across broadband, telephony and line rental, 40% higher than the previous year. The operator added 155,000 broadband customers in the quarter, a 53% increase on the previous year, meaning it ended March with 3.2 million broadband subs. Sky said 26% of its customer base now takes TV, broadband and telephony services.

“At a time of significant pressure on household budgets, we have added over 800,000 subscription products as more customers choose Sky for a greater variety of services.

Take-up of high definition remains very strong and we have had another excellent quarter in home communications, with 26% of customers saving money by taking all three of TV, broadband and home phone,” said Jeremy Darroch, Sky’s CEO.

The operator also claimed early success for its Sky Atlantic channel that launched in February, saying it had reached over 10 million viewers in the first two months. “Customers are choosing Sky for a better choice of television and 2011 is shaping up to be our best year yet on screen. Our new channel, Sky Atlantic, has got off to an excellent start with 10 million viewers in the first two months. Alongside Sky 1 and Sky Living, it forms part of an outstanding entertainment line-up that will bring even more value to customers in the months ahead, including a growing commitment to UK drama and comedy,” said Darroch.

Sky reported quarterly revenue of £1.65 billion, up from £1.46 billion a year earlier. EBITDA increased to £344 million.

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