Subscriber slowdown is not important

Analysis by INVESTORS in BSkyB shouldn’t get too wound up about slowing growth in subscriber numbers. While the timing might have something to do with the consumer downturn, new customer additions were always going to tail off after the company passed the 10m mark. Indeed, just two years ago, many bearish analysts thought the 10m target would remain an elusive dream.

Management always knew that the scorching growth rate wouldn’t last, which is why they have turned their focus to growing the all-important average revenue per user (Arpu) metric. Although the company has boosted by almost a third the number of customers taking the so-called triple play package of TV, phone and broadband, there is still much room for further growth. Virgin Media, its closest rival in the UK, has 63.8 per cent of its customers taking three of its services.

Then there are the nice-to-have extras such as high definition TV, 3D TV, sports and movies. While these add-ons might struggle in the immediate future, Sky’s market-leading offering leaves it well placed to benefit when the upturn comes. Until then, it can sit back and throw off tonnes of cash.