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    Wednesday, 30 May 2007

    Bleak outlook? report suggests VirginMedia no substitute for BSkyB

    A lot's been happening over the past few weeks in the Sky-Virgin stand-off. A report prepared by investment bank UBS and widely reported in the media today (1,2,3) has suggested that VirginMedia's failure to agree a deal with BSkyB for the provision of its basic channels may ultimately cost it getting on for 1/2 million subscribers. Nonetheless, while Sky's share price may have risen on the news, in the context of ongoing regulatory probing its a fair guess that its executives will have been less buoyant (Sky have purportedly been looking to offload / swap its stake in ITV for the equivalent in Channel 5). Interestingly, the UBS report also found that 14% of customers "appear to have an ideological aversion to Sky and are unlikely ever to subscribe".

    That said, VirginMedia - where the Board and executives have themselves been under stress (rumours of takeover bids, uncertainty over executives' contracts, the threat of boardroom upheavals, allegations of rebuffed peace deals etc) - dismissed the report as outdated. So, maybe the news tonight is neither good nor bad... just old.

    1 comment:

    Andrew Scott said...

    A second report, this time prepared by Morgan Stanley, has also questioned the competitive position of VirginMedia: see VirginMedia 'likely to continue losing market share to Sky'

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