BSkyB beats hopes with customer numbers

Broadcasting group BSkyB turned up the pressure on rival Virgin Media today by unveiling much better than expected customer numbers.

BSkyB signed up 340,000 customers in the UK in the three months to the end of March - knocked down to 51,000 after taking into account a large number of viewers that also quit the group, but still almost double the figure forecast by analysts.

The rise follows a high profile spat between BSkyB and cable group Virgin Media after the two broadcasters failed to agree on contract renewal negotiations for Sky basic channels.

Analysts had predicted a rise in the number of new joiners after Sky withdrew channels including Sky One and Sky News from Virgin Media at the end of February, although forecasts were pegged at just 25,000 net new customers for the quarter.

Sky downplayed the suggestion that it may have picked up customers from Virgin Media, pointing instead to the growth of its broadband offering and “See, Speak and Surf” telecoms package.

The group added 264,000 broadband customers in the quarter.

News of the better-than-expected figures will come as a blow to Virgin Media, which rebranded from NTL earlier this year and pledged to go head to head with Sky for top spot in the UK’s entertainment and telecoms industry.

Virgin Media has since started high court proceedings against Sky over the contract row and said it will seek damages if an agreement cannot be reached to compensate for loss of customers it claims have left as a result of the dispute.

The argument has cost Sky too, however, with the group estimating that the loss of fees and advertising revenues from the channel withdrawal is set to cost it between £15m (€21m) and £20m (€29m) in the current financial year alone.