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BSkyB profit knocked by BT footie struggle and O2 broadband costs

'I totally expected that to happen', says Darroch

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BSkyB has felt the pinch from huge operating costs as it continues to battle with its pay-TV archrival BT and absorbs the buyout of O2's consumer broadband network.

The giant media firm reported a jump in total revenue of £1.84bn for its first quarter this morning - up 7 per cent from £1.71bn in the same quarter a year ago. It added that retail subscription sales climbed 7 per cent to £1.5bn thanks to price hikes and "strong product and customer growth".

The company added that O2's broadband revenue had helped to "broadly offset" the loss of ESPN sales, after Sky ended its retailing deal with the sports TV channel in July.

But pre-tax profit took a hammering, down to £245m from £288m for the same period in 2012.

Programming costs associated with Sky's bitter Premier League television battle with rival BT ate away at adjusted operating profit, which fell 8 per cent to £285m during the quarter.

Sky's boss Jeremy Darroch said:

Adjusted operating profit was in line with our expectations as we invest in new services and absorb higher Premier League costs.

Sky added that the consolidation of O2's consumer broadband and fixed line telephony biz had hit operating profit, comprising £19m of sales and £19m of operating cost.

Darroch said he was pleased with the company's broadband performance, after it finally passed the 5 million mark for subscribers to that service during the first quarter ended 30 September with 111,000 customers signing up.

At the end of the ISP's previous quarter, Sky had gobbled about 400,000 subscribers following its purchase of O2 and Be's home broadband network from parent telco Telefonica.

Ahead of the merger, The Register noted that a staggering 119,000 subscribers had ditched O2 and Be's broadband service as it fell into the clutches of BSkyB. ®

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