BSkyB avoids effects of hacking scandal

Published on Sunday 29 January 2012 00:00

FIRST-HALF trading figures from BSkyB are expected to show the satellite broadcaster has avoided any negative effects from the News of the World (NotW) phone-hacking scandal despite a bid by shareholders last year to block James Murdoch’s re-election as chairman.

The results on Tuesday come after Murdoch, the former boss of the NotW, quit his non-executive role at drugs giant GlaxoSmithKline on Friday to focus on Sky and his senior roles within father Rupert Murdoch’s News Corporation.

Murdoch junior suffered a revolt at Sky’s AGM in November when more than 40 per cent of shareholders – excluding the 39 per cent stake held by News Corp – failed to back his re‑election as chairman.

However, one analyst said: “The caravan has moved on and it will be more about the BSkyB fundamentals this week. I suspect there will be little read-across from the phone hacking. The bid by News Corp is also dead, and Sky will want to draw a line under a difficult period.

Patrick Yau, media analyst at Peel Hunt, said: “I want to know how many of the customer base are taking more than two of BSkyB’s three key product lines of pay satellite TV, fixed line telephony and broadband because that’s the strategy in a nutshell.

“The market will want to see sequential growth on the roughly 2.9m customers, about 28 per cent, who took all three services at the Q1 [first quarter] stage.

“This is important because it pushes up average revenue per user and reduces churn [the number of customers who later discontinue them]. Consumers are nervous about the economy and are receptive to packages of products at discounted prices. The more you are able to offer the Sky subscribers the less likely they are to go elsewhere.”

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