25 July 2000

Satellite broadcaster BSkyB will tomorrow announce its intention to cease analogue television transmissions in August next year – almost eighteen months earlier than expected, a move that could trim a cool £60 million off its cost base. Chief executive Tony Ball had previously set the date for the end of 2002.

Details of the plan will accompany Wednesday’s posting of Sky's full year results. However, the switch-off is likely to incur a one-off penalty of up to £30m, payable to satellite group SES-Astra for early termination of its contract.

The early termination underscores Sky’s success in persuading viewers to switch to its digital services – thereby vindicating its high-risk strategic decision last year to give away the set-top boxes needed to receive its digital service. According to analysts, at the end of June BSkyB had amassed 3.65m digital subscribers, compared with a total satellite subscriber base of 4.5m.

Consumer take-up of terrestrial digital TV is running at a much slower pace and the government has promised that the earthbound analogue signal will not be switched off until 95% of Britons are able to receive a digital signal – or 2010, whichever comes first.

News source: Financial Times