At the end of 2010, the company smashed through the 10 million customer barrier for the first time, putting it in 36% of homes in the UK and Ireland, but more recently subscriptions have slowed as consumers cut back on luxuries.
When the group last updated the market, it said that 26,000 households signed up for its TV services in the three months to September 30, bringing the total to 10.2 million. This was significantly down on the 96,000 who signed up in the same period a year ago.
With chief executive Jeremy Darroch also warning that the pressure on consumers’ incomes was likely to lead to more challenging times ahead, analysts are expecting further pressure despite a strong line-up of new entertainment shows such as Boardwalk Empire and Glee.
The group has moved to make itself more competitive by announcing a price freeze. And it has been compensating for the slowdown in new TV subscribers by selling more of its other products such as high definition TV, line rental, telephone and broadband packages to existing customers, although subscriptions to these services too are expected to slow.
The group’s share price has fallen in recent weeks amid fears over subscription levels and uncertainty over the auction of new rights to screen Premiership football matches, which are a mainstay of its programming.
The City expects profits to rise by 8% to £563 million in the six months to December 31, on sales up 5% to £3.4 billion.
Lorna Tilbian, an analyst at Numis, said: “Given the macro challenges, we believe gross additions and HD upgrades will be hard to come by and churn could increase, though as the economy improves we expect growth to return.”
She forecast second quarter net TV additions of 52,000, compared with 140,000 a year ago. There will also be fall in new HD customers, to 197,000 compared to 343,000 a year ago, while broadband additions will slow to 181,000 from 204,000. For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today
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