Sky flexes muscles for broadband deathmatch

by Steve Kerrison on 28 July 2006, 17:19

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The RegisterBSkyB has released its annual results, parading its weapons-grade financial clout for the upcoming triple-play and quadruple-play tussle.

For the twelve months ended 30 June 2006, revenues were up 8 per cent to £4.15bn, while pre-tax profits were up 1 per cent to £798m. Operating profit rose 7 per cent to £877m, which was adjusted to £561m, giving earnings of 30.7 pence per share.

The £11m operating loss of Easynet, which comprised revenues of £79m and costs of £90m, was swallowed easily. Sky has so far invested net £12m in its residential broadband roll-out, including £1m in marketing, which can be expected to increase as the battle intensifies.

Sky chief James Murdoch said: "We feel encouraged by the strong demand our customers show for new entertainment and communications services."

Sky will be delivering some sport, movies and Disney content over broadband soon. Its broadband range, launched last week, starts at a "free" 2Mb connection, rising to £10 a month for a 16Mb package, and is available exclusively to Sky TV punters. Bosses see broadband and its fixed line phone service Sky Talk as a way of shoehorning its core pay TV business into homes.

Sky hired 1,500 new call centre staff and 600 home engineers in preparation for demand for its broadband offerings. It spent £37m on LLU over the year. Yesterday Carphone Warehouse conceded it did not prepare well enough for its launch.

Read the full statement from BskyB here (pdf).®

HEXUS.links

HEXUS.headline - Sky offers 'free' broadband to 'all' its TV subscribers
HEXUS.headline - Carphone Warehouse reveals details of 'free' broadband - it's war!
Sky - Sky Broadband internet service
Sky - Sky by broadband video downloads


HEXUS Forums :: 3 Comments

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Posted by DR - Fri 28 Jul 2006 17:30
Shocking amount of money…

… for sure one a force which you wouldn't want to be up against.

Would be interesting to see if they do a “Set-top Box” which does Sky+ and also allows you to route it around the house with Cat5 or something for multi-room…. Maybe an MCE/Viiv/AMDLive Layer?

One reason I suspect they want to explore and go the BB route is to tie people in, and the other is I suspect its a lot cheaper than Satelite broadcast - oh and means you don't need engineers on sides of houses etc… :)
Posted by Funkstar - Fri 28 Jul 2006 18:54
certainally a BB connected STB makes sense. Means it doesn't have to dial a phone line for interactive serivces.
Posted by arthurleung - Fri 28 Jul 2006 20:26
If I'm not wrong the service is up to 16Mbps not 6Mbps, with the fiver per month one being 8Mbps /w 40G cap.

Not all ISPs can run at a loss, Sky is basically screwing up most (if not all) budget ISPs now.
If the FUP of the unlimited 16Mbps is more clear, it could potentially suck up many high-usage users (actually it attracts both light and heavy users, probably resulting in cost neutral)

In my case, since I don't even have a TV license (too expensive and useless, paid to broadband instead), moving to Sky+BB won't be any cheaper than my Zen 2Mbps uncapped connection.

One more thing. What if Sky offer FON boxes to the users to build up a large Wifi network, that could bring Sky into the mobile market too (Better than the Openzone and GRPS rip-off)