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October 22, 2010
BSkyB is now certain to pass its long-held target of hitting 10m customers by end 2010 after adding 96,000 new subscribers in calendar third-quarter to reach 9.956m homes.
Despite a slight slowdown in year-on-year growth, the operator now needs just 44,000 new homes during the traditionally strong pre-Christmas quarter where it consistently adds well in excess of 100,000 customers. We have held our forecast of 10.145m subscribers by end 2010. BSkyB also saw strong growth in telephony and broadband customers, adding 178,000 broadband users to reach 2.802m and 203,000 telephony customers to reach 2.570m. There were 1.946m line rental customers. ARPU grew to £514 annualised, in line with our forecasts.
BSkyB's new Sky Anytime+ progressive download VoD service will launch 26 October free for Sky HD customers on the Sky broadband network. In addition to library movies and TV content, the service will also offer HBO 'box sets', added as part of Sky's recent exclusive rights deal with the US premium pay TV group that will also fuel launch of new HD channel, Sky Atlantic.
HDTV remains a key driver for Sky, with net HD additions stable at 429,000 in the quarter. The Sky Anytime+ service and new 3D channel should help maintain HD additions, although we do not expect that either service will result in a major boost to HD additions. The recent simplification of Sky's broadband offer and the tie-in to the Sky Anytime service also seem to be having a positive impact on Sky's telephony, broadband and line rental uptake as expected. Sky's ARPU is now fast approaching the levels achieved by rival Virgin with its longer history of offering triple-play services although it is unlikely to pass Virgin's ARPU any time soon.
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