Sky, which launched its "free" broadband for subscribers offer in July, has apparently avoided the supply problems and related bad press experienced by Carphone Warehouse, which started its own land grab with free broadband for Talk Talk subscribers in April resulting in its profits tumbling 62%. Sky's "free" package refers to its basic 2Mb service, capped at 2Gb usage, which has no monthly charge but carry installation and activation fees of £90. Other package range from £5 a month to £17.
Sky said by the end of October it had received around 1m registrations of interest from customers and 113,000 actual orders, of which 74,000 had been connected so far. It said it has accelerated its processing to handle 20,000 orders a week.
Carphone Warehouse this week said it has so far connected around 425,000 customers out of 625,000 who have signed up. The move has cost the mobile phone retailer £45m over the six months to the end of September and pushed it £4.6m into the red.
Costs relating to Sky's broadband rollout and its acquisition of the Easynet IPS last year were £42m, leaving its operating profit at £180m and its pre-tax profit at £166m.
In its traditional satellite TV business, Sky added 82,000 subscribers, the biggest first quarter rise for three years, to reach 8.26m. Subscriber churn for the quarter was 11.8%, which was 0.1 percentage points higher than a year ago.
Sky+ sales continue to beat the company's expectations and the PVR is now taken by more than 20% of Sky households.
The company's total revenues grew by 11% year-on-year to £1.07bn.
James Murdoch, chief executive of Sky, said: "This has been an important period for the company. We are building on our leadership in pay television and are becoming an increasingly well-positioned challenger in the £20bn combined industry for pay television, broadband and telephone services.
"While it is still early, we are pleased with the progress since the launch of Sky Broadband and in just 15 weeks, we've seen a great response from Sky customers. Our preparations, pace of provisioning and investments in service and systems to manage demand are performing well."
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