BT has upped the ante in its battle with BSkyB to retain broadband customers. Subscribers to its reduced cost broadband service will have free access to its share of Premier League football games. BT has invested £2.5bn in its high speed broadband network and a further £1bn over three years in its sports channels.
BT has upped the ante in its battle with BSkyB to retain broadband customers. Subscribers to its reduced cost broadband service will have free access to its share of Premier League football games. BT has invested £2.5bn in its high speed broadband network and a further £1bn over three years in its sports channels.
The consumer can only benefit, but for BT its an expensive gamble in its bid to retain market share. Nevertheless, it also hits BSkyB whose shares fell by more than 6 per cent in trading yesterday. Analysts think that it will put pressure on their margins and growth rate. It is seen as potentially the biggest challenge to Sky in sports broadcasting in the last 20 years.
Since BSkyB began offering home broadband and telephone services to its pay TV service BT has lost about half its home telephony customers. For a time BT was able to sit on its laurels as customers stayed with the former monopoly provider for reasons of inertia.
It now has about 10 million domestic customers, of whom more than half use its broadband service. (Some analysts give a figure of 6.7m for retail customers, but this may include some small businesses working from home). BSkyB is not far behind with 4.4m broadband customers at the end of March, a rise of 152,000 over the first quarter of the year.
BT has cut the cost of Infinity, its high-speed fibre broadband product, to £15 a month. Existing BT customers will receive three BT sport channels, including Premier League football. Virgin Media customers cannot get BT sports channels at present, but there are continuing negotiations. A deal would give BT more revenue and Virgin Media a better offer.
BT has also targeted the lucrative pub and club market with tariffs which would undercut BSkyB by about 80 per cent. Tariffs would range from £60 to £800 a month with BSkyB currently making from £200m to £300m a year for this market.
BT emphasise that they are in sports broadcasting for the long term. Their new studio in the former media centre at the Olympic Park will include a full size 18 yard box for its studio team to stage re-enactments of key moves. It will be possible to see Owen Hargreaves passing to Michael Owen with ‘Calamity’ James letting in a shot he should have saved. Let’s hope no one gets injured.