Sky cuts HD box cost as results show strength

LONDON - BSkyB has raised its bet on high-definition television by cutting the upfront cost of its HD box to £49 today, after revealing recession-beating results with customer growth of 171,000 and substantially reduced churn.

The company now has 9.24m customers, with eight quarters left to meet its target of 10m subscribers by the end of 2010.

Sky said it saw a "significant opportunity" emerging in HD, after a sharp increase in demand over 2008. Between the third and fourth quarters of 2008, the number of customers taking Sky+ HD rose by 188,000 to 779,000.

The cost of the Sky+ HD box is being reduced from an average price of £150 in the second half of 2008; the installation fee is £30 and the HD content package is £9.75 per month.

Sky+ is also mushrooming with a 12.4% increase over the same period to 4.65m subscribers, while Sky Broadband subscribers rose by 9% to 1.96m.

The success in selling its customers the additional services was credited by the company for reducing annualised churn from 10.9% in the third quarter of 2008 to 9.9%, and increasing ARPU from £430 to a record £444.

Sky reported a pre-tax profit of £147m for the quarter ending December 31, up from a pre-tax loss of £157m in the same quarter in 2007. Revenues came in at £1.35bn, an increase of 6.2% year on year.

With the company increasing its interim dividend by 5% to 7.5p, its share price climbed 7% this morning to 466p as of 8.45am.

Income from TV consisted of £165m in ad revenues, down £2m year on year, and £93m in wholesale subscription revenues, up £5m year on year and benefiting from the return of Sky's basic channels to the Virgin Media platform in November.

Jeremy Darroch, chief executive, said: "In a very challenging economic environment, we have delivered a great set of results by focusing on quality, value and service for our customers ... We enter 2009 in a strong position."

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