Sky debuts free broadband for existing customers Murdoch promises to 'push the boundaries of home entertainment'
By Jane Hoskyn vnunet.com 18 Jul 2006 http://www.vnunet.com/articles/print/2160612 Sky entered the 'free broadband' war this morning, promising reduced bills for its pay-TV customers and a sunny outlook for investors. Sky Broadband's 'Base' package will be offered free to Sky's eight million existing digital TV subscribers, regardless of the TV package to which they subscribe. The broadcaster claims that the deal could cut some household bills by as much as £300 a year. The free product has download speeds of up to 2Mbps and 2GB monthly usage. Sky's premium products, Sky Broadband Mid and Max, have download speeds of 8Mbps and 16MB respectively for an extra £5 or £10 per month. All customers also get a free wireless router, a year's free McAfee Security and the option of professional home installation. In addition, the package includes Sky Talk, which allows unlimited UK landline calls for £5 per month. However, in order to receive Sky Broadband, customers need to be covered by Sky's broadband network. The network currently covers 28 per cent of UK households, including London, Birmingham, Manchester, Edinburgh and Glasgow. It is expected to cover 70 per cent by the end of 2007. Unveiling the package at this morning's event for analysts and investors, Sky chief executive James Murdoch said: "Sky Broadband is a compelling product which rewards our customers with a quality service offering flexibility and great value." Murdoch embraced the opportunities arising from local loop unbundling. Sky, it seems, wants to dominate every corner of the communications media. "Sky is ideally equipped to enter the large and growing markets of broadband and telephony. By pushing the boundaries of the home entertainment market, we will help our customers realise the full potential from technological convergence," he said. Murdoch was also bullish about the company's financial outlook. Sky's entry into the so-called free broadband war follows its £211m acquisition of Easynet in 2005, and Sky Broadband is anticipated to need further investment of £400m over the next three years. As vnunet.com reported yesterday, analysts at Credit Suisse have dubbed Sky Broadband "the most expensive churn management tool ever seen in pay TV". Standard & Poor's equity analyst Yannick Mathieu warned that fast-buck investors will be disappointed. "While it's the right thing to do in the long term, competition will eat away any economic advantage in the short term," he said. Murdoch has his eye firmly on the long-term. He told investors that Sky has a clear strategy to build a solid broadband customer base and target online revenues from advertising and search. He also said that the pay-TV business is on track to achieve 2010 targets. "The business case is clear," he said. "We believe our investment will enhance top-line growth, be earnings enhancing from 2010 [and] deliver increasingly attractive returns thereafter." This morning's launch is available to view as a webcast on Sky's corporate website, along with text, podcast and videocast interviews with James Murdoch. Permalink to this story www.vnunet.com/2160612 ================================ George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 antunes at uh dot edu Reply with a "Thank you" if you liked this post. _____________________________ MEDIANEWS mailing list [email protected] To unsubscribe send an email to: [EMAIL PROTECTED]
