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Sky adds 46,000 broadband customers in the last quarter
Friday 22 April 2016 09:52:49 by Andrew Ferguson

Sky may have added the smallest number of broadband customers for some time with 46,000 new broadband additions in the three months to the end of March 2016 but this is offset by a 15% increase in operating profit. Looking back at our records July 2014 with 50,000 additions reported was the last similarly performing quarter.

Sky is still firmly the second largest broadband retailer in the UK with some 5,943,000 broadband customers and while the latest results do not give any detail on the split between ADSL2+ and VDSL2 products, but given we know Openreach supplies VDSL2/FTTP to around 1.8 million connections that are not via BT Retail we suspect Sky has somewhere in the region of 750,000 VDSL2 (FTTC - Fibre to the Cabinet) customers.

"In the UK and Ireland we had a good quarter of growth, following a strong first half. We focused our marketing on building brand awareness for Sky Q, ahead of the first installations towards the end of the quarter. In Q3 we added 70,000 new retail customers and 438,000 new products, including 46,000 new broadband additions. Churn for the quarter was 10.7%, reflecting our decision to limit discounts; we believe this impacts the quarter by around 10,000 additional customers churning. Revenue was up 6% to £6,161 million (2015: £5,824 million) which, together with our strong focus on operating efficiency, delivered a 15% increase in operating profit to £1,154 million (2015: £1,004 million)."

Extract from Sky results for period ending 31st March 2016

The reason for the drop in growth is hinted at in the report to investors and that is in a highly competitive retail environment where once people get above the basic speeds needed to deliver streamed video the biggest drive is price and signing up to a service with the best offer, be that low price or free gifts.

Sky has been working with CityFibre in York on a joint venture also involving TalkTalk and while we have been seeing plenty of TalkTalk users testing connections in the area, as yet no identifiable Sky users and an article in The Times may explain why. While during the run up to the big once a decade review by Ofcom Sky was calling for Ofcom to hive off Openreach out of the BT Group, it now appears the tide has turned and Sky is comfortable as a wholesaler of Openreach's fibre products. This suggests that the joint venture in York is not going to be the prelude to Sky rolling out a similar network to millions of homes, but rather a continuation of the sale of Openreach VDSL2 and perhaps once G.fast and FTTP roll-outs accelerate using those. The York service was always described as a trial, with the aim to pass some 20,000 premises which apart from a few small areas has been done. For Openreach this will all be good news, as even if Ofcom goes all Defcon 1 on a full split (which it claims to have retained the ability to do) if Openreach does not perform, it is highly likely that the two largest broadband retailers would be on-board as anchor tenants.

Comments

Posted by TheEulerID 8 months ago
So the strong implication is that Sky now see BB primarily as a means of upselling to their subscription services and that network investment/operation is not profitable in its own right.

There is also the implication that exchange based ADSL2 might gradually wither away, although decommissioning would be problematical due to voice services.
Posted by comnut 7 months ago
sky may be the second largest, but a LONG way down on the popularity stakes... (reader reviews)
http://www.ispreview.co.uk/review/top50.php

Any chance of adding 'available ISPs' to your map?? :) :)
this has it, NOTE you don't need to enter postcode, just zoom in to map..
https://www.samknows.com/broadband/exchange_mapping
Posted by comnut 7 months ago
The reason why BT is 'most used' is that they are the ONLY ISP in many areas...:(
Posted by andrew (Favicon staff member) 7 months ago
https://labs.thinkbroadband.com/local/index.php?tab=3 has availability at the postcode information.

As for BT being the only ISP, one must assume you are discounting all the other ISP who use BT Wholesale, and that 95% of UK has a LLU option.
Posted by TheEulerID 7 months ago
@comnut

You are making a common statistical mistake in mistaking geographic coverage for population coverage. The vast majority of premises have a choice of LLU ISPs, and over half have a choice of network provider too.
Posted by binary 7 months ago
"...but given we know Openreach supplies VDSL2/FTTP to around 1.8 million connections that are not via BT Retail..."

Does the reference to BT Retail connections include BT subsidiary Plusnet?
Posted by chris6273 7 months ago
"The reason why BT is 'most used' is that they are the ONLY ISP in many areas...:("

No they are not, unless you are referring to BT Wholesale. More or less anywhere you can get BT Retail services, you can get products from ISPs who use the same BT Wholesale platform.
Posted by comnut 7 months ago
andrew: yes, but Please put it on *your map*.... :)
Posted by comnut 7 months ago
TheEulerID: I dunno *where* you imagined that... ????
Posted by comnut 7 months ago
I see, you are lost in the 'tech view'... :/
Most *helpful* ISPs will ask "have you a BT line?" ..
and some I know would say "no I dont want BT, I want you.."

I guess what they do after that depends on the company?? and WHO do they talk to about connecting their customer?

It about the same as thinking 'PCworld' and 'Currys' are two *separate* companies...:P

https://en.wikipedia.org/wiki/PC_World_(retailer)
https://en.wikipedia.org/wiki/Currys
Posted by andrew (Favicon staff member) 7 months ago
No point putting exchanges onto the map when already searchable.

Or is there some massive latent demand that no one has ever asked for before.
Posted by TheEulerID 7 months ago
@comnut

Because you said "The reason why BT is 'most used' is that they are the ONLY ISP in many areas". The area coverage is pretty well immaterial when the vast majority have a choice of ISPs.
Posted by jonwatts 7 months ago
Sky, quite wisely IMO, see no value is trying to compete with others in building out expensive fibre/cable infrastructure which doesn't guarantee customers will use their service over that of the competitors. The majority of Sky customers, as the article mentions, will be happy with a 'good enough' broadband service which provides reasonable "Superfast" broadband in the 15Mbps to 30MBps range.
Posted by AndrueC 7 months ago
Sky don't seem interested in targeting anyone technical. I'm a Sky HD subscriber and I called them last year to ask about broadband. I wanted an up to 80/20 service with static IP. Speed was not a problem but static IP was. The chap I spoke to said it would 'probably' be available but the only way to find out was to order the connection then upgrade it once it was active.

Needless to say I didn't proceed with the order :-/
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