The question of whether Sky is the third biggest UK broadband provider will need to wait for the equivalent quarterly results from TalkTalk, but as TalkTalk has actually shed a small number of customers the last couple of quarters, Sky can risk putting the champagne in the fridge.
The Sky broadband service is centered arounds its LLU products, which having gone live in the 2000th exchange in August is now available on 2,036 exchanges. The LLU network accounts for 95% of customers with only 221,000 using the more expensive and slower Sky Connect product. The shift from a shared LLU platform to a full LLU platform (where both telephone and broadband are connected to Sky hardware) continues, with all new activations on the full LLU system. This push for LLU is evident in that the proportion of full LLU lines is 71% versus 43% two years ago.
There is no breakdown of which broadband products customers are taking or how many fibre customers Sky has. What is clear is that the bundle policy is paying dividends as the number taking a triple play service has increased by five percentage points in the last year to 33%, and the ARPU is now £550.
In theory the rise of low cost film services like Netflix and Lovefilm Instant could decimate the subscription TV service that is the core of Sky, but that arm is still growing in numbers, and Sky with its launch of NOW TV and enhancements to its On-Demand service including Sky+HD boxes with larger storage capacities suggest the battle will not be an easy one for competitors. Sky TV is in some 10,654,000 homes, so with attractive bundles the provider still has many years of potential growth ahead, for example if its free Lite broadband service with a 2GB monthly usage cap were to jump to 10GB of inclusive data, this could be extremely disruptive in the budget end of the market.