Sky Reports UK Growth in Mobile and Broadband for H1 2018

Sky (Sky Broadband) has today published their latest results to the end of December 2017 (financial H1 2018), which reveals that Fibre (FTTC) penetration increased to 33% (up from 21% last year) of their UK broadband base but there’s still no sign of their Sky TV without a satellite dish (IPTV) service.

Unfortunately Sky has long since stopped providing a breakdown of their broadband figures, although we estimate that they have a total base in the UK and Ireland of somewhere between 6.1 and 6.2 million (out of 12.9 million total retail customers).

The latest report also confuses matters somewhat by conflating product and customer figures: “We added 180,000 customers in the first half, including 110,000 in Q2, and grew our product base by 1.7 million. This included 157,000 new TV products and 30,000 new Broadband products,” said Sky.

However Sky did report that they had managed to attract a total of 335,000 customers to their new O2 MVNO based Sky Mobile platform in the UK (including in Q2 adding 131,000 and increasing their share of handset market sales to 9%). The provider also plans to launch Voice-over-Wifi calls to improve airtime margins and a new tablet / accessory proposition, although no specific dates were given.

We had hoped that Sky might also take this opportunity to announce the UK launch date for their recently touted Sky TV without a satellite dish service (i.e. an IP / broadband-based TV service that will offer much more than the limited NOW TV product) but unfortunately that’s not quite what happened

Instead the operator intends to launch this in “Italy before taking it to Austria and ultimately deploying across all our key markets,” which means that their customers in the UK will have to wait a little longer. Sky claimed this approach will “open up headroom in existing markets, improve our cost to serve for some customer segments and offer a future way to take Sky into new markets.” BT and Virgin Media already have similar products.

Jeremy Darroch, Group Chief Executive, said:

“In innovation, we are constantly improving our customers’ experience and making it easier for them to take Sky. In the UK & Ireland Sky Q is now in 2 million homes. We recently launched Sky Q in Italy and will roll out the service to Germany & Austria in the next six months. We will also introduce Sky over fibre in Italy and our first all IP service in Austria, both without the need for a satellite dish.

Looking ahead, we expect the consumer environment to remain challenging, however we remain confident in our strategy and our ability to execute our plans.”

On the financial front Sky UK saw their 12-month rolling churn fall from 11.6% a year ago to 11.2% today, while their Average Revenue Per User (ARPU) fell from £47 to £46 over the same period. Meanwhile revenue for H1 2018 stood at £4,438m (up from £4,267m in the same period last year) and EBITDA for their established business reached £973m (up from £841m).

Check out Sky’s H1 2018 Results document for more.