Sky Profit Drops

LONDON, November 2: BSkyB’s profits for the three months
ending September 30, 2007, fell almost 28 percent to £84 million despite growth
in its subscription base and an 11-percent revenue gain to £1.2 billion.

The company’s spat with Virgin Media—which is no
longer carrying the Sky basic channels as a result of a dispute over carriage
fees—is partly to blame for the fall in the satellite platform’s
earnings. Sky estimates that the non-renewal of the basic channels carriage
agreement by Virgin Media will adversely impact operating profit by around £15
million for each full quarter that the channels remain off the cable platform.
Sky also noted the financial impact of the new contract to offer Barclays
Premier League games.

Net customer growth in the quarter was 83,000, giving Sky a
base of 8.665 million customers. Sky+ PVR homes saw record 14 percent growth,
to 2.7 million, and HD customers rose 23 percent to 358,000. Sky Broadband
experienced 31-percent growth to 223,000, while Sky Talk customers were up 29
percent to 153,000. Churn for the period fell from 12.1 percent to 11.3
percent, and ARPU was down £1 to £411.

—By Mansha Daswani