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Morgan Stanley suggests that while the market might enjoy speculating as to what Rupert Murdoch, or a new cellular giant might do as regards BSkyB’s future, the reality is that BSkyB has its head down and is getting on with its “day job”.
The pre-Christmas build up to December 31st saw Sky place considerable resources behind promoting its NowTV offering which includes a general entertainment offering for £5.99 a month as well as a movies option at £8.99 and 24-hour sport package for £9.99. Morgan Stanley expects conventional DTH subs to remain more or less flat during the period, but to have added around 50,000 net additions in TV during the quarter-year. “HD growth we assume steady at 100,000. The success of SkyGo may impinge on the growth of Multiroom which we have at 10,000 in Q2. SkyGo Extra grew we think at 250,000 subs in the quarter.”
The bank suggests Sky Broadband growth of 120,000 net adds, 150,000 in telephony and 160,000 in line rental. These numbers will take BSkyB’s RGU to an impressive 33.3 million.
Perhaps worrying is that the bank expects Churn to stay about the same at 11 per cent which “may be viewed negatively by the market”.
The report does touch on the whole Premier League dilemma and suggests a wholesale agreement with BT Sport might represent an “escape route” for the broadcasters and dampen the fears of content inflation. Morgan Stanley also largely discounts this past weekend’s gossip about any sort of link with Vodafone.