Growth Improves as Sky Broadband Reaches 5.32m UK Customers

After a predictable slowdown in the second quarter Sky Broadband (BSkyB) has today seen its growth improve in Q3-2014 by adding an extra +75,000 (up from +50k in Q2 and +70k in Q1) home broadband subscriptions to total 5,322,000, which has no doubt been helped by the recent spate of aggressive discounts (24 months free broadband etc.).

Unsurprisingly Sky also added +118,000 new Line Rental customers in Q3 to total a cool 5 million, which is up from +93k in Q2. But as usual there’s absolutely ZERO information about the take-up of their superfast “Sky Fibre” (FTTC) packages or the operators pure fibre optic (FTTP) trials in York (jointly with CityFibre and TalkTalk) and their other similar experiments in Basingstoke etc.

In total, 37% of Sky’s customers now take all three of TV, telephony and broadband from the provider and they’ve also managed to unbundle (LLU) 2,372 telephone exchanges from BT’s grip (up from 2,367 in Q2). Overall some 84% of Sky’s broadband and phone customers now connect via the operators fully unbundled (MPF) platform (up from 83% in Q2), while 16% use their shared unbundled (SMPF) network (down from 17%) and 218,000 customers are still forced to use the BT-based network (up from 214k).

Jeremy Darroch, BSkyB’s CEO, said:

“We have made a strong start to the year. After a year of investment, we are seeing the returns coming through with good top-line growth of 6% translating into an 11% increase in profits.

This strong financial performance was fuelled by continued operating momentum. We are seeing broad customer demand for our products whilst opening up new revenue opportunities. In all, we added 760,000 new paid-for products, 8% more than the previous quarter.

The investments that we have made in new connected TV services are delivering growing benefits to our business. We extended our lead as the UK’s largest connected TV platform, surpassing 6 million connected homes. Sky Store more than doubled its revenues and our mobile TV service Sky Go Extra achieved a record quarter of growth. The benefits are clear as connected customers watch more TV, spend more with us and are more loyal.

Three months into the year, we are delivering against a clear strategy for growth in our existing business. At the same time, we are making good progress with our proposed acquisition of Sky Italia and a majority stake in Sky Deutschland.”

On the financial side Sky’s annual Average Revenue Per Use (ARPU) was flat at £576 and their churn increase from 10.7% in Q2 to 11.0% in Q3. Meanwhile Sky’s quarterly operating profits reached £316m in Q3, which compares with £285m at the same time last year. Clearly BT’s big push with BTSport hasn’t quite landed a killer blow on Sky’s position in the market.