BSkyB Is In Talks To Buy AOL U.K., Pushes Broadband By JESSICA HODGSON Wall Street Journal
July 19, 2006; Page B6 http://online.wsj.com/article/SB115327829371610815.html?mod=europe_technology_primary_hs LONDON -- British Sky Broadcasting Group PLC is in talks with Time Warner Inc. to acquire AOL U.K., its United Kingdom Internet unit, BSkyB Chief Executive James Murdoch said. BSkyB also unveiled an aggressive drive into the U.K. broadband market, earmarking higher-than-expected capital expenditures to cover the cost of signing up new customers. The U.K. satellite broadcaster, 38%-owned by News Corp., said it expects to spend £400 million ($730.8 million) of earnings before interest and taxes in the next three years on launching its new product, Sky Broadband, which it expects to contribute to earnings in the year ending June 30, 2010. Mr. Murdoch said his interest in the AOL unit was "opportunistic," adding he wasn't interested in overpaying for the asset. AOL's European business is the subject of a continuing strategic review by Citigroup Inc., after Time Warner decided to refocus on its portal business and abandon Internet access. People familiar with the situation said earlier this month that three indications of interest have been received for the U.K. unit of the business. Alongside BSkyB, France Télécom and Carphone Warehouse Group PLC have also sought information memoranda from Citigroup, these people said. People familiar with the auction said at the time that the £600 million price tag attached to the business was unrealistic. BSkyB, the U.K.'s largest pay-TV operator, with 8.1 million subscribers, said it will offer free broadband access to all existing customers covered by the BSkyB broadband network. Analysts had expected it to offer free broadband only to top-tier pay-TV customers. Sky Broadband will offer three levels of broadband access, from a free service with speeds of up to two megabits per second to a connection of 16 megabits per second, priced at £10 a month. New customers will pay an introductory price of £15 a month for BSkyB's digital-television service, allowing them to sign up for broadband at the same time. BSkyB shares fell 4% in early trading as the market reacted to the higher-than-expected investment numbers. The shares were down 21 pence, or 4%, at 520 pence. ================================================= George Antunes Voice (713) 743-3923 Associate Professor Fax (713) 743-3927 Political Science Internet: antunes at uh dot edu University of Houston Houston, TX 77204-3011 Reply with a "Thank you" if you liked this post. _____________________________ MEDIANEWS mailing list [email protected] To unsubscribe send an email to: [EMAIL PROTECTED]
