Business

BSkyB revenues jump after strong customer demand

 

Broadcaster BSkyB has seen revenues grow strongly as services expand and customer numbers continue to grow past the 10m mark.

Revenues for the past nine months rose 14% to £4.8bn. In the January to March period, revenues grew 13% to £1.46bn.

The average price paid by its 10.1 million customers has risen from £503 to £544 a year.

Approval for a bid for the company by Rupert Murdoch's News Corp is currently being considered by the government.

News Corp, which owns four newspapers including the Sun and the Times newspapers, already owns 39% of BSkyB.

In June last year, News Corp told the broadcaster it was interested in taking over the 61% it did not own at 700p a share, well above the 600p the market valued BSkyB at before it knew of the majority shareholder's interest.

That was rejected by BSkyB directors who said they would accept no less than 800p.

Investors are currently valuing the shares at some 850p each, making the business worth about £15bn.

News Corp may not be willing to go that high.

Scrutiny

In any case, the regulatory hurdles have not been fully cleared.

Media takeovers are highly scrutinised by watchdogs who are wary of concentrating too much power in individuals or companies control.

European regulators found no reasons to block any bid, although in November last year, Business Secretary, Vince Cable referred the proposal to Ofcom on the grounds it could limit the "plurality" of choice of media in the UK.

Ofcom raised concerns and News Corp then promised to make BSkyB's Sky News an independent company in order to avert a full-blown regulatory investigation by the Competition Commission.

Culture Secretary Jeremy Hunt, who has since taken over responsibility for the matter, will give his final decision on whether this answers the plurality issue soon.

BSkyB said in its results statement it had no update on the public consultation, but said it was continuing to co-operate with the regulatory process.

It also said pre-tax profit for the third quarter was down 33% to £238m. However, last year's third-quarter profits had been boosted by a one-off investment sale gain of £115m.

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