THE UK’S broadband providers saw their shares dive yesterday after BT’s aggressive move to enter sports TV threatened to kick off a price war.
After months of speculation and more than £1bn of investment, BT pledged to offer its broadband customers free access to its new sports channels, in a bid to wrestle back the initiative from BSkyB.
The shock move sent Sky’s shares falling by more than six per cent, while TalkTalk fell over 12 per cent, making the two stocks the biggest fallers on the FTSE 100 and FTSE 250 respectively. BT itself dropped 2.3 per cent, and by the end of the day £1.6bn had been wiped off the three companies’ combined market value.
“We believe that [BT’s pricing strategy] reduces the value of the UK pay-TV market significantly but that is not BT’s concern,” Liberum Capital’s Lawrence Sugarman said.
BT, threatened by Sky’s vigorous push into internet services, is offering its new channels free to broadband customers to encourage users to switch over.