£150m Satellite Dish Tax Threatens NewsCorp's BSkyB

25 November 2003

BSkyB, the News Corporation-controlled UK satellite TV monopoly, is used to bombshells from outer space -- the BBC's recent decision to drop Sky as it's satellite transmission service, for example.

But that was a mere fragment of space detritus compared with the possible meteor strike by a £150 million ($254.9m; €216.02m) annual tax burden that may be imposed on the company's subscribers.

Under the UK's recently enacted Communications Act, new supra-regulator Ofcom is to investigate use of the TV signal spectrum -- for which all UK terrestrial broadcasters with the exception of BSkyB currently pay an annual fee.

Terrestrial channel Five, seen by many TV insiders as most comparable to Sky (in that it has no public service broadcasting obligations and reaches 85% of all UK households), pays £24.6m annually for its use of the spectrum.

Among the options currently under consideration by Ofcom is an annual 'satellite dish' tax of £20 which, if levied on Sky's seven million-plus subscribers, could reach up to £150m yearly - a move that would almost certainly impact adversely on BSkyB's ambitious growth plans.

Chairman Rupert Murdoch said recently [WAMN: 05-Nov-03] he is aiming for around twelve million customers in the medium term. Such a tax, if imposed, could hole that ambition below the waterline.

Data sourced from: BrandRepublic (UK); additional content by WARC staff