BSkyB Posts Record Profit Amidst Hacking Turmoil
Broadband growth drives up BSkyB profits as the company battles with negative attention over the hacking scandal
BSkyB has posted record profits largely thanks to growth in its broadband division, as the company battles with tough media scrutiny over hacking allegations.
The company scored its strongest quarter yet in the first three months of 2012, thanks to 702,000 net broadband, telephony and line rental product additions. The firm added 212,000 broadband customers alone, over the previous quarter.
BSKYB gets compensation from News Corp
BSkyB’s revenue was up five percent to £5.2 billion, as profit after tax hit £689 million. The company also benefited from a £31 million “break fee” from News Corporation offset by related costs. Rupert Murdoch was forced to pay that fee to BSkyB after News Corp failed to take control of the business.
“More households are choosing Sky and taking more products from us because we’re constantly looking to improve the quality and value that we offer,” said chief executive Jeremy Darroch.
“Already in 2012, we’ve launched an entirely new channel dedicated to Formula 1, given millions of households access to a huge choice of on demand TV and made our market-leading broadband service even better with the launch of our fibre products and free out-of-home Wi-Fi.”
I see trouble ahead…
Not all is well at BSkyB, however. The company and News Corp, which owns a controlling stake in BSkyB, is facing scrutiny over hacking allegations.
Ofcom is currently looking into Sky News’ actions after it admitted to hacking the emails of of “canoe man” John Darwin and his wife Anne. The pair were sent to prison after it was discovered the husband had faked his own death, whilst his wife was living in their marital home, benefitting from the life insurance payouts.
Ofcom is also trying to decide whether BSkyB should even be allowed to hold a broadcasting licence after revelations of phone and computer hacking by News of the World and other papers owned by News Corporation. BSkyB has claimed it is a “fit and proper” owner of a broadcasting licence.
