BT to take on Sky and push TV packages 'more aggressively' as it gears to break back into mobile market
BT will push its TV packages ‘more aggressively’ as the group gears up to break back into the mobile market.
The former telecoms monopoly wants to bolster the number of families taking its TV service as well as internet and home phone before it launches consumer mobiles next year.
‘You will see us change the focus going forwards’, said chief executive Gavin Patterson, who indicated the group could pursue a target of signing 100,000 new customers up for TV every three months – almost three times the current rate.
Linchpin: House of Cards, starring Kevin Spacey as a ruthless politician, will be available via BT’s TV service
The landline and internet giant will launch box-set streaming service Netflix next month in an addition to its foray into the sports market, it announced yesterday. The service, which otherwise costs upwards of £5.99 a month, allows customers to watch large numbers of films or other popular series such as political drama House of Cards on demand. It will be available on BT’s YouView box.
The scaling up of BT’s ambitions comes as the group unveiled a 13 per cent bump in half year profits to £690million. It signed up 38,000 customers to its TV arm, and more than 1million households now take its TV packages.
But shares fell more than 2 per cent to close 7.6p down at 367.9p after the number of new customers taking broadband slowed to 88,000 in the three months – the slowest rate of growth in two years.
The number was 48 per cent of the households signing up to new internet providers across the UK during the three months. But analysts had expected it to attract up to two-thirds of the market.
There are also fears of a looming price war, with arch rival Sky offering two years free broadband to customers who pay for Sky Sports, and TalkTalk trying to undercut BT.
The next auction of Premier League football rights is also in the spring, and there are expectations that Sky will try to beat BT to the best games to maintain its dominance. The company forked out £738million for the rights to show 38 games. Patterson tried to play down fears, saying: ‘It’s not necessarily going to inflate. The prices we paid last time were pretty chunky.’
More than 3m homes can view BT’s sports channels, which will next year screen the European Champions League competition.
But the group is determined to corner the market for ‘quad play’, where households take all four services – home phone, mobile, TV and internet – from a single provider.
BT’s first foray into the mobile market was with its Cellnet division, set up in 1985, which was spun off as O2 in 2001.
At the company’s City briefing on its figures, analyst Paul Sidney at Credit Suisse asked whether the company was at a ‘tipping point’ where ‘it makes sense for BT to push it [TV] more aggressively’ to add customers in the hundreds of thousands rather than the tens of thousands.
Patterson replied that BT’s TV operation had been a lower priority previously. ‘You will see that change going forwards,’ he added.
BT currently gives away its sports channels free to its broadband customers – a tactic it employed to try to prevent households from switching away from its highly lucrative internet packages.
But it has admitted it will begin charging for Champions League games, and Patterson indicated that it could charge more for TV in the future.
‘When you get to the point of spending billions then it would be unrealistic to expect that to be a pure free proposition,’ he said.
Its consumer division, which makes up around a quarter of BT’s business, was the only part of the company that saw revenues grow, after they rose 7 per cent to £1.1billion.
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