BSkyB to reduce prices for broadband packages: Sunday Telegraph

British satellite TV firm BSkyB plans to reduce prices for its broadband packages in response to competition from BT's new sports channels, according to a report in the Sunday Telegraph.

The price cuts, would be applicable to internet and television bundles sold by the Rupert Murdoch-owned firm, which would be announced early this week, according to the newspaper, which cited unnamed sources.

BT last month said it would screen free English Premier league soccer matches to its broadband customers, after it paid a huge sum for the rights to show 38 live matches. These would be available from August as the new season got underway and would be the first time such matches had been aired free in over 20 years.

The BT announcement led to a fall in both BT and BSkyB shares, as also those of smaller broadband providers such as TalkTalk, over fears a potential bidding war would cut profits.

The British pay-TV market has been dominated by Sky in the last decade, which still retained the rights to 116 live matches. It was also expanding into BT's territory to offer broadband and telephone services to its 10.7 million households.

BT, a former state monopoly, countered with the development of an online TV service designed to persuade customers to upgrade to its superfast broadband.

Meanwhile, Newsline, citing sources, said, a statement from BSkyB would be issued early this week concerning the company's internet and television bundles,  that would be a "market changer".

Media Tel is a subscription-only service and is the largest single-source of media intelligence available online in the UK.

Peter Oliver, commercial director for BT Consumer, told The Telegraph, that BT thought Sky customers were grossly overcharged and welcomed any cuts they made to their package.

He said many sports fans had broadband, through the company and its TV through Sky. He added Sky's channels would be free for those households, and the company would be happy seeing their monthly bills reduced by Sky.

BSkyB's current charges are £617.50 each year for access to its full list of sports channels, as against  BT offering an equivalent deal for £261 to watch the channels via a laptop, coupled with an extra £110 per year for a set-top box.

The performance of  BSkyB "could be a lot worse than you think", Bank of America Merrill Lynch said in a recent financial forecast, which rated  the business as "under-performing" as BT and TalkTalk offered cheaper and more competitive TV offerings.