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BSkyB Annual Review 2006Print this pageDownload PDF version

Ruppert Murdoch portrait

"
OUR CONTINUED SUCCESS HAS BROUGHT ABOUT BOTH INCREASED REVENUES AND RECORD OPERATING PROFIT. THEY ARE ACHIEVEMENTS WHICH WOULD PERHAPS PROMPT ANY ORDINARY COMPANY TO WANT TO REST ON ITS LAURELS. BUT SKY, AS YOU MAY HAVE GATHERED, IS ANYTHING BUT ORDINARY.
"

Rupert Murdoch
Chairman, BSkyB
Ruppert Murdoch's signature





1 in 3 Homes

WITH 8.2 MILLION DTH SUBSCRIBERS NEARLY ONE IN THREE HOMES IN THE UK AND IRELAND HAS CHOSEN SKY.





1 in 5 Customers

IN ADDITION TO LAUNCHING MOBILE, BROADBAND AND HIGH DEFINITION SERVICES, SKY+ AND MULTIROOM ALSO GREW FASTER THAN EVER BEFORE. MORE THAN ONE IN FIVE CUSTOMERS TAKES AN ADDITIONAL SERVICE FROM US.

Chairman's Statement

The story of Sky's continued success comes down to a single factor. Rather than simply ensuring that the company keeps pace with the tremendous changes that are occurring in broadcasting and communications, we act as a facilitator of these changes. It was what launched Sky on the path to growth in 1989 and our strategic moves over the past 12 months ensure we will continue to maintain a strong position in the marketplace and meet the needs of an increasingly demanding audience.

In the past year we took a series of important steps that will allow us to grow into new segments of the market and add value to the offering our subscribers receive: we launched Europe's first national high definition broadcast service, completed preparations for the roll-out of residential broadband services and the upgrade of our customer management systems.

The high definition television service, Sky HD, ranks as perhaps the most significant development in television since the launch of colour in the 1960s, delivering as it does pictures four times as vivid as conventional broadcasts. The HD offering, which involves the purchase of a Sky HD box, a high definition-compatible TV and HD channels, is being rapidly embraced by consumers.

This year we also moved beyond the broadcast stream. A package of live channels can now be watched by consumers on the move via their mobile phone. Sky by broadband enables premium customers to download sports and movies to their PCs at no extra cost. A quarter of a million customers have signed up for the service so far. At the same time we completed the acquisition of the broadband provider Easynet that will lead to the eventual integration of broadband into the core customer offering. By the end of 2007, we expect that Easynet's unbundled local loop service will have coverage of around 70% of UK homes.

We also successfully completed the implementation of new customer management systems to help us serve subscribers better and enable the Group to improve sales, increase customer satisfaction, reduce churn and bring to market new products and services with greater speed and effectiveness.

Customers continue to be attracted to packages offering the widest range of viewing choice available. The total number of subscribers in the UK and Ireland grew 5% to 8.2 million, representing approximately one in three homes in UK and Ireland. One in five of our customers also takes one of our additional services such as Sky Multiroom or Sky+. The growth in Sky+ has been a stand-out achievement of the year with 75% growth to a presence in more than one and a half million homes.

In summary, the robustness of our current offering and the addition of new and innovative services that give consumers greater control of the viewing experience pave the way for Sky's continued success.

Having served on the Board of Directors for over 14 years, Lord St John of Fawsley has decided not to seek re-election at this year's AGM and will retire from the Board. I would like to thank Lord St John for his contribution to the Board over many years. He will, however, still be connected with Sky in his new role of Chairman of the Artsworld channel, building on his extensive experience as a patron of the arts.

Finally, I want to thank all my colleagues at Sky - including those who have recently joined the Group from Easynet - for their hard work and dedication and for ensuring that Sky grasps the opportunities that social and technological trends present to ensure we remain leaders in the fields of entertainment, information and communication.

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The Annual Review is a summary report on the full year to 30 June 2006, intended
for the investor not needing the full detail of the Annual Report.

As a summary report, the Annual Review does not contain sufficient information
to allow as full an understanding of the results and state of affairs of the Group as is provided by the full Annual Report.

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