BSkyB Near Its Target of 10 Million Pay TV Subscribers

CEO has no update on News Corp. bid for full control of U.K. sat TV giant

LONDON - BSkyB is less than 50,000 customers away from its target of achieving 10 million pay television subscribers by the end of 2010, in what would amount to an extraordinary performance from Europe's most successful pay TV platform.

But CEO Jeremy Darroch declined to give guidance on the matter of Rupert Murdoch's News Corp.'s bid for the outstanding 61% of the satcaster that it doesn’t already own, saying only that there was a "proposal" under consideration. Many other media companies have lined up in opposition to the proposed deal.

Announcing its fiscal first quarter results Friday, the U.K. satcaster said it added a total of 96,000 net subscribers in the three months to the end of September, taking it total customer base to 9.956 million, well ahead of market forecasts.

Revenues rose 15% to £1.5 billion, while adjusted operating profit rose 25% over the year-ago period to £255 million.

"There is no offer today, we have a proposal," Darroch said Friday about the potential acquisition of full control by Murdoch's media conglomerate. "In the near term, News Corp. are due to give formal notification to the European Commission. That will kick off a regulatory process," he said on an analyst call.

Sky now has to sign just 44,000 subscribers in its second quarter - traditionally the strongest quarter of the year because it includes attractive pre-Christmas offers - to achieve the 10 million subs by the end of 2010 target first set by then-CEO Tony Ball in 2002.

The platform has continually held steady through a near-decade of extraordinary economic turbulence, and continually updated its customer offering by adding broadband functionality, launching DVR services, HD services and now 3D television, as well as maintaining control over a range of key content including Premier League soccer and major U.S. series and movies.

In the most recent quarter, BSkyB added 178,000 broadband subscribers, taking total numbers to 2.8 million, while its telephony customers grew by  203,000 to 2.5 million in total. This uptake was the highest quarterly growth rate recorded in two years.

Sky also added 215,000 new HD customers, taking the total number of Sky households with the service to 3.15 million.

"Today's results show that our consistent strategy is delivering an excellent performance in a challenging environment," said Darroch. "Strong top-line growth is converting to accelerating profit and earnings."