BSkyB Announces Free Broadband for Digital Television Subscribers

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BSkyB Announces Free Broadband for Digital Television Subscribers

12:27 am on July 19, 2006 | Category: Business, Telecom Services, Internet, Television

UK satellite television provider, BSkyB, has launched firmly into the broadband pricing war, announcing its intentions to offer free basic internet service to select subscribers.

Existing users of the Sky Digital television service will pay nothing for the 2 Mbps broadband internet product, while new subscribers will be able to sign up for as little as £5 per month.

This move is a clear indication that BSkyB isn’t just interested in attracting new users, but also keeping a firm hold on its existing customer base. The company is pitching free broadband as a surefire way to prevent Digital TV subscribers from moving to another provider.

Shareholders, however, are skeptical of the plan, due to the huge initial losses that it will incur. BSkyB’s shares dropped 4.3% yesterday upon news that the company would need to invest £250 million in startup and equipment costs, as well as an additional £400 million to expand the service over the next three years.