Sky weighs up tactics to tackle new TV rival BT

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SKY is expected to square up to new television rival BT by cutting the price of some of its packages ahead of the start of the football season.

BSkyB is looking at a range of possible tactical discounts across its subscription TV and internet bundles to minimise the attraction of BT’s sports channels, which launch in August and will be free for BT broadband customers.

BT made an ambitious entrance into the world of sports television last summer when it won the rights to broadcast 38 Premier League games a season for the next three years.

The telecoms group paid £738m for the rights and has splashed out further by hiring presenters such as Jake Humphrey and picking up additional sports coverage including the rugby union Premiership.

BT’s three channels will be free for its 6.3m broadband customers, or £12 a month for the 10m households on Sky TV contracts.

An announcement on Sky’s discounts could come as soon as this week, according to the Telegraph.

Sky declined to comment yesterday.

Analysts have argued that BT’s entry into the market might set off a price war, although some have also warned that BT could end up running its services at a loss.

Morgan Stanley said in a note last week that it expects revenues from BT Sport to total between £140m and £370m a year, which would be below the £375m approximate cost.

More than a third of these revenues will come from Sky customers adding a BT subscription, the analysts added, while up to 31 per cent of turnover is expected to come from Virgin Media customers switching over.

A poll by the bank showed just one per cent of viewers using Freeview considered themselves “very likely” to subscribe to BT Sport.