Slow subs growth predicted for BSkyB

BSkyB will unveil its mid-year results (to December 31st) on January 31st. Another investment bank analyst has forecast that the pay-TV operator’s subs growth will stumble for its second quarter (to December 31st).

Bank of America Merrill Lynch, in a note to clients, says it expects BSkyB to show a net subs growth of 55,000 (well down on 2010’s same period 140,000) and that churn will have risen from 9.5 per cent last year to 10.3 per cent in Q2.

The bank’s report suggests that converts to HDTV have also slowed, with and extra 130,000 subs taking Sky’s HD offering (down 60 per cent on last year).

While those aspects may be down, there’s solid growth – albeit with core additions softening somewhat – from Sky’s broadband and triple play activity, and the bank expects “robust growth” in Sky’s all-embracing ‘value proposition’. It expects Sky to add 150,000 broadband subs (vs 204,000 last year), Sky Talk (150,000 subs, vs 187,000) and line rental at 220,000 (vs 269,000).

Inevitably there is bound to be a falling off from the plateau-effect as Sky moves away from signing up new TV subscribers to that of being a multi-tiered communication supplier.

“We expect total customer ARPU of £537 (Q1 £535), with growth constrained by the September price freeze. We expect subscription revenue growth to slow from 7.3 per cent in Q1 to 4.8 per cent in Q2 (and to 4 per cent for the full year), and total revenue growth of 5.3 per cent,” says the bank.  “We forecast Q2 operating profit of £301 million (full year £1226 million) and earnings per share (EPS) of 12.1p.”

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