YouView launch set to hit Sky

Steve Dinneen
Follow Steve
BSKYB will come under pressure from new BBC-backed on-demand TV venture YouView, according to a new report by Evolution Securities.

Media analyst Steve Malcolm also says Sky’s encroachment into its rivals’ broadband market – particularly BT and TalkTalk’s – is “overstated”.

Malcolm estimates the digital switchover will soon bring Freeview and BBC and ITV-backed YouView to around 22 per cent of UK households, which, combined with severe pressure on consumer spending, could dent Sky subscriptions.

Sky is currently the undisputed king of pay-TV in the UK with more than 10m subscribers. YouView was set to launch in the second quarter of this year but industry sources believe delays may push the date back to late 2011 or early 2012.

The report says Virgin Media will be the big winner over the next few years as its broadband is generally quicker and more reliable – an increasingly important consideration for consumers.

Evolution is generally positive for the sector as a whole, issuing “buy” recommendations on Virgin, TalkTalk and BT, and an “add” for Sky.

•Cable & Wireless Worldwide (CWW) pulled off a remarkable coup yesterday when it announced it hadwon a multi-million pound communications contract for engineering firm Babcock from BT.

CWW will now be the sole provider of telecoms services to the firm, which has major contracts with the Ministry of Defence and Network Rail. The value of the deal has not been announced but sources close to the firm told City A.M. it is worth “significant single-digit millions”.

CWW will focus on consolidating Babcock’s 250 sites across the UK, creating encrypted networks for its defence, communications, education, nuclear and rail businesses. The deal will be seen as a blow for BT’s Global Services division.