Sky Ireland gears up to launch broadband
by Maxim Kelly
Sky Ireland is seeking opportunities to launch a broadband service in Ireland, ENN has learned.
The TV company's parent, BSkyB, said in its first quarter financial statement on Friday that it has activated 74,000 broadband accounts in Britain since the service was launched in August. BSkyB has invested STG400 million to launch a broadband product and also acquired internet service provider Easynet on another STG234 million splurge earlier this year.
BSkyB's first quarter pre-tax profits for the period ending 30 September fell 17 percent as result of the investments to STG166 million (EUR247 million).
Sky Ireland deputy managing director Mark Deering said the company was "actively looking for opportunities" to launch a broadband service in Ireland, "but different market dynamics in the Republic meant BSkyB's business plan had to be modified."
In the UK, broadband services were offered to Sky TV subscribers for free with a STG5 or STG10 monthly upgrade available.
Deering said Easynet's expertise would be drawn on to launch an Irish broadband product.
"The options we're looking at are, firstly, organic growth whereby we use Easynet to pursue local loop unbundling (LLU) -- which is expensive and will take around 18 months, and, secondly, an acquisition of an existing broadband provider. The other option is to enter a partnership agreement and get into bed with someone like Smart, Magnet, BT or Eircom," Deering told ENN.
In the wake of Sky News switching off its twice-nightly Irish news bulletin -- with the loss of 21 jobs in Dublin and five in Belfast -- Sky Ireland said it will be concentrating on new media outlets for continuing its Irish content. The company said it is refocusing its efforts on the Irish arm of the Sky.com website, and on mobile TV news content which will include an Irish news bulletin.
Sky Ireland launched a free 3G mobile phone news service in July, and recorded 60,000 unique users. A fee was introduced in September and the number of monthly users dropped to 50,000 according to Sky.
"A diminution of only 10,000 is fantastic and we expected a lot worse," said Deering. "The appetite for mobile TV news seems to be better in Ireland than Britain on a pro rata basis."
In terms of TV subscriptions, Sky Ireland's latest figures show 606,000 cable customers -- only 2,000 more than the previous quarter.
However Sky digital subscriptions reached 441,000 in September, representing a net increase of 14,000 over the quarter, and a 55 percent increase in the customer addition rate compared the same period last year.
BSkyB's latest high definition offering, which requires a HD TV, currently has 96,000 subscribers, nearly 5,000 of whom are believed to be in Ireland, although Sky Ireland would not confirm this.
Across Britain and Ireland, the total number of Sky's direct-to-home (DTH) digital satellite subscribers was 8.3 million, representing a net increase of 82,000 in the quarter. Revenues for the quarter increased by 11 percent to STG1.1 billion (EUR1.6 billion), while operating profit for the period was STG180 million (EUR264 million).
Earnings before taxes and other charges, excluding Easynet and the impact of the residential broadband launch (STG34 million), increased by 8 percent to STG258 million.