Virgin mulls free football

Steve Dinneen
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VIRGIN Media is considering plans to give away Premier League matches for free as part of a package including its broadband, TV subscription and telephone services.

It joins BT Vision, which is also considering offering top flight matches as part of its existing “bundle” deal, according to industry sources.

If the firms go ahead it will be the first major attack on Sky’s dominance of the subscription TV market.

The Rupert Murdoch owned firm has 9.5m subscribers in the UK, followed by Virgin Media with 3.7m. BT Vision is lagging behind at just 450,000. But the coveted Premier League games are a massive draw and serious competition from BT and Virgin could blow the market wide open.

Virgin and BT can currently buy Sky’s basic sports package for a wholesale price of £13.40. But an Ofcom review, expected to publish its findings in two weeks, is likely to slash the price Sky can charge to as little as £8. This means BT and Virgin may be able to absorb the cost within their existing packages.

Former Sky boss Tony Ball, now a director at BT, suggested the idea to the BT board as a way to resuscitate its flagging Vision brand. Ball was a vociferous subscriptions builder at Sky and is keen to see BT Vision advance towards the 3m users it planned before its launch in 2006.

A Virgin spokesman said: “We are considering a number of options but we will have to wait until the announcement of the results of the Ofcom investigation.”

A BT spokesman said: “We have made it clear on several occasions that, should the pay TV review force Sky to wholesale its services, we would look to offer Sky Sports for somewhere in the mid teens, a substantial saving on the price currently charged by Sky. The review is not complete however and so we will have to wait for its outcome.”

A Sky spokesman said: “We will wait for Ofcom to publish its report and take things from there.”
Meanwhile Virgin Media announced it will offer HD TV to its customers for no extra charge. It will be available through a new set-top box that will cost a one-off £49 to new and existing customers. The move is likely to herald the end of extra fees for HD TV, which has thus far cost users around £120 a year.

It also announced it will refinance the some of its outstanding debt. It has renegotiated £1bn of loans with Deutsche Bank, BNP Paribas, BofA Merrill Lynch, Crédit Agricole Corporate and Investment Bank, GE Capital, Goldman Sachs International, JP Morgan, Lloyds TSB Corporate Markets, RBS and UBS. It will be repaid in increments of between £150m and £275m between now and 2015.