Pay TV firm BSkyB Plc beat forecasts with a net 82,000 new TV subscribers in the first quarter of its financial year and said it had received a million registrations of interest in its new broadband service.
BSkyB's investment in the fiercely competitive broadband market - taking on BT, NTL and Carphone Warehouse - drove down first-quarter pretax profit by 17 percent to 166 million pounds, within analysts' forecasts.
Britain's biggest satellite TV firm said on Friday the TV subscriber growth was its best first-quarter performance for three years. The figure smashed the average forecast of 60,300 in a Reuters poll of 10 analysts.
In the first statement on its new broadband service, BSkyB said it had 113,000 broadband orders and within that 74,000 were active customers. It said it had around one million registrations of interest in the service as of October 31.
"Overall, it's an encouraging set of numbers," NCB analysts said. NCB said it had been expecting around 120,000 broadband orders, but said registrations for the new services were well above forecast. Cazenove analysts said the registration figure was double their expectation of 500,000.
At 0952 GMT, BSkyB shares were up 1.27 percent at 557 pence. The firm posted an 11 percent rise in revenue to 1.07 billion pounds. Annualised average revenue per subscriber (ARPU) for the quarter was 385 pounds, a 6 pound decrease on the previous quarter. BSkyB, 39-percent owned by Rupert Murdoch's News Corp, has said it plans to invest 400 million pounds over three years on its entry to the broadband market.
The service, launched in July, is only available when bundled with Sky's pay-TV service. James Murdoch, Rupert's younger son and BSkyB's chief executive, has said the short term costs of moving Sky to a hybrid satellite-Internet platform would pay off by increasing customer loyalty and enabling services like video-on-demand.
But the only slightly disappointing note on Friday was the churn figure, or percentage of customers who dropped their subscriptions, which was 11.8 percent, slightly above the analysts' expectation of 11.4 percent. In a conference call with reporters, Murdoch said he was pleased with broadband's progress and the "tremendous response" they had received and said their goal was to reduce churn to 10 percent in the medium term.
"We have more confidence than ever in our ability to grow just as we've said which is to 10 million customers (by 2010) and particularly to position ourselves to grow above that," he told reporters. "While it is still early, we are pleased with the progress since the launch of Sky Broadband." BSkyB's chief financial officer Jeremy Darroch described the firm's investment in the broadband service as "more than manageable" and said the company would not be revising its guidance of 400 million pounds over three years.
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