BSkyB to upgrade set-top boxes and content to fend off BT

LONDON Fri Jul 26, 2013 7:40pm BST

Satellite dishes are seen on the side of a block of flats in south London in this July 29, 2011 file photo. REUTERS/Luke MacGregor

Satellite dishes are seen on the side of a block of flats in south London in this July 29, 2011 file photo.

Credit: Reuters/Luke MacGregor

Related Video

Related Topics

Quotes

   

LONDON (Reuters) - BSkyB plans to provide more and cheaper ways to access its premium content and Internet services to counter cash-rich rival BT's offer of free Premier League football to broadband customers.

The group, which has dominated pay-TV in Britain since Rupert Murdoch launched it in 1989 and reaches 10 million homes, said it would invest about 70 million pounds ($100 million) in the next financial year to improve on-demand programming and connectivity.

BSkyB said it will promote its Internet-connected set-top boxes which provide wifi in the home and allow users to view content on their televisions as well as providing access on laptops and tablets when they are out.

The company also announced full-year results in line with or above analysts' forecasts, a 500-million-pound share buy-back and an 18-percent dividend hike to try to temper investor concern over BT's entry into the market.

"This morning's results and accompanying commentary provide a clear reminder of BSkyB's underlying strengths including an unrivalled content proposition, loyal subscriber base, very strong cash flow and proven marketing skills," analysts at Westhouse said.

"We believe these characteristics will stand it in good stead when facing down growing competition for new customers, particularly from BT."

Shares in BSkyB - known for years for promising "jam tomorrow" due to its ever-present investment needs - dropped 3.3 percent by 1030 GMT. Its stock fell sharply on May 9 when BT announced its plans for the free sports offering.

The move is consistent with the group's historical approach of providing technology to enable customers to pay increasing amounts to access premium content such as sports and movies.

"The main concern will be the additional investment, but we see this as a pull-forward of existing plans," Citi analysts said in a note. "And at any rate, this may not even impact consensus earnings per share in 2014 given the buyback. We see this as a strong set of results and rate BSkyB Buy."

Adjusted operating profit for the year was up 9 percent to 1.3 billion pounds, helped by an increase in the amount customers are willing to pay for the service to an average annual amount of 577 pounds.

(Editing by Louise Ireland)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (1)
MrBeck wrote:
“BSkyB said it will promote its Internet-connected set-top boxes which provide wifi in the home and allow users to view content on their televisions as well as providing access on laptops and tablets when they are out.”

This sentence is complete rubbish. Does the author know what they wanted to say?

Jul 26, 2013 7:07pm BST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.