Sky reports accelerating customer growth in first quarter of 2015

Sky has continued its run of accelerating customer growth - with the number of new subscribers in the past quarter two-thirds higher than last year. 

A total of 242,000 net customers joined Sky in the three months to March. That is the biggest number for that period since 2004, although it is roughly half the growth of the previous quarter.

The figure includes Sky's Italian and German operations, which were acquired from its biggest shareholder, 21st Century Fox, last year. 

Jeremy Darroch, Sky's chief executive, said the company was "doing the big things right", pointing to the launch of big-budget drama Fortitude and the further rollout of internet TV services. Sky's shares rose 4 per cent to £10.94 in early trading on Tuesday.

In the UK, where the broadcaster added 127,000 new customers, there was no detail as to the breakdown between customers taking traditional TV subscriptions, 'pay-light' NowTV bundles and broadband. 

Liberum analyst Ian Whittaker questioned "the quality of these customers", noting that average revenue per user had risen only £1 per month in the past seven quarters. 

However, Citi's Tom Singlehurst said that Sky's falling churn - or rate of customers cancelling their subscriptions - "should be a launch pad for better growth" through increased prices. 

The quarterly results come before Sky implements a significant price rise in the UK - an average of between £2.50 and £3 a month per TV customer. That move has led Virgin Media to reiterate its complaint that consumers lose out from the way Premier League rights, a major part of Sky's costs, are sold. 

Sky's revenues for the nine months to March grew 5 per cent to £8.45bn, with growth in Germany and the UK offsetting a continued decline in Italy. Earnings before interest, taxation, depreciation and amortisation were up 10.7 per cent to £1.5bn. 

The company said it was on track to make £200m in annual cost savings within three years following its acquisitions of Sky Italia and Sky Deutschland. 

Mr Darroch said that Sky could grow alongside Netflix, the video streaming service that is estimated to have more than 2m subscribers in the UK. "It would be wrong to characterise it as an either/or," he said. "It's about growing the pie."

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