BSkyB talks up Scottish skills as surge in demand drives expansion plans

Published on Thursday 30 July 2009 21:48

BSKYB yesterday raised the prospect of further expansion in Scotland after attracting customers at its fastest rate for five years.

The satellite broadcasting giant has defied the recession to increase customers by 462,000 over the past 12 months.

The surge in demand, which outstripped analysts' forecasts, was driven in particular by the strong take-up of Sky's high- definition (HD) service after it reduced the price of its HD box from 150 to 49.

About 1,000 jobs have been created across the UK since January to support the boom in HD. BSkyB finance director Andrew Griffith told The Scotsman that yesterday's results will lead to further job creation north of the Border, where the broadcaster already employs about 6,000 people.

He said: "Certainly, over time, I would expect Sky with its large, growing subscriber base to expand employment in all of its hubs and that would include Scotland. In fact, colleagues in Scotland have been pivotal to dealing with the spike in demand for HD."

BSkyB, which is 39 per cent owned by Rupert Murdoch's News Corp, unveiled a 4 per cent rise in adjusted operating profit to 780 million. Profit growth has been held back by considerable investment in both HD and broadband but the company said it is making "good progress" towards offsetting these costs. It raised its full-year dividend by 5 per cent to 17.6p per share.

Chief executive Jeremy Darroch yesterday revealed his ambition for the broadcaster to become the first in Europe to expand into 3D television. Sky intends to launch its first 3D channel next year, which will allow subscribers to achieve the same kind of viewing experience at home as they would at an Imax cinema.

Analysts described the results as "impressive" against the wider downturn in consumer spending. Sky now has access to just over 9.4 million British homes.

Paul Reynolds, media analyst at Deutsche Bank, said: "Sky has set itself apart as a company in the sector that has successfully reinvested in its business, clearly continues to offer the right products to new and existing customers and has a robust profit outlook for the medium term."

However, concerns remain over Ofcom proposals that would force Sky to make some of its premium sport and movie content available to rivals.

A consultation on the recommendations closes in September and Griffith reiterated that the firm is likely to launch a legal challenge if the regulator decides to implement its proposals.

"We think success in any market should best be determined by consumers, rather than the regulators, and risk-taking and innovation should be rewarded by businesses being allowed to make a fair return," he said.