BSkyB Profit Drops, Despite Strong Subscriber Gains

LONDON, November 3: British Sky Broadcasting added 82,000
subscribers in the first quarter, ending the period with 8.258 million
customers, but the company still saw after-tax profits drop £24 million to £116
million, on revenues of £1,071 million, 11 percent up on last year.

“This has been an important period for the company,” said
Chief Executive James Murdoch. “We are building on our leadership in pay
television and are becoming an increasingly well positioned challenger in the
£20 billion combined industry for pay television, broadband and telephone
services. Sky has delivered the highest first quarter subscriber growth for
three years and is seeing high demand across our range of services. One in
three families in the U.K. and Republic of Ireland are choosing Sky for the
widest choice in television and now almost a quarter of those families take at
least one additional product from us as well. While it is still early, we are
pleased with the progress since the launch of Sky Broadband and in just 15
weeks, we’ve seen a great response from Sky customers. Our preparations, pace
of provisioning and investments in service and systems to manage demand are
performing well.”

Murdoch continued, “Our strategy is leading to an increase
in revenue growth with overall revenues up 11 percent in the quarter. Our
expansion into new areas is supported by continued growth and strong financial
performance with pay television EBITDA up 8 percent in the quarter. A wide
choice of quality programs, innovative services like HDTV, Sky+, and broadband
are not only attracting new customers, but also offering new services to
existing customers. There’s never been a better time to join in.”

Sky+ penetration now stands at 20 percent, with 1.7 million
homes, an increase of 139,000. Multiroom households increased by 46,000 in the
quarter to 1.1 million, representing 13-percent penetration of total DTH
subscribers. Sky HD subscribers more than doubled during the quarter to 96,000.

Annualized average revenue per DTH subscriber for the
quarter was £385, a £6 decrease on the previous quarter. DTH churn for the
quarter was 11.8 percent.

As of the end of October, 113,000 had ordered Sky Broadband,
and of these, 74,000 customers’ broadband lines had been activated. The total
number of Sky Talk customers was 204,000.