BT calls on UK regulator to probe Sky's pay-TV 'dominance'

DetailsEditor | 10 July 2015

As it presses home the advantage it has with rights to popular pay-TV programming, UK telco BT is calling on the country's broadcast regulator to investigate rival's Sky's perceived market dominance.

JOhn Petter BTIn a speech to the UK Broadcasting Press Guild, BT Consumer Division CEO John Petter urged Ofcom to formally amend the scope of its Digital Communications Review to include pay-TV, citing high prices and poor outcomes for consumers arising from a lack of competition. Specifically it called out its arch-rival for overcharging customers, drawing comparisons with the price of broadband with that of pay-TV service, slamming what it called 'real market failings' in pay-TV where Sky was the dominant player.

Petter used data from an Analysys Mason pay-TV pricing and triple-play review in November 2014 showing that 10.5 million UK Sky customers are paying £4.34 per month above the European average on basic TV packages. He added that Sky customers that take premium options like sport and movies are paying £6.33 per month above the European average.

Commenting on the figures, Petter said: "Whereas in the energy market regulators have criticised the Big Six operators, in pay-TV Sky has a 64% share, so there is really only the Big One. Relative to EU averages Sky customers are paying around a half a billion pounds more per year for the basic packages of pay-TV channel. Switching in pay-TV is 50% lower than the levels seen in broadband, so it is clear we just aren't seeing the right levels of competition for Sky".

Petter added that even the arrival, and subsequent rights success, of BT Sport hadn't changed the overall market dynamics given the dominance of Sky. He asserted that the fact that BT Sport has attracted 2.4 million viewers who weren't previously viewing Sky Sports, was evidence of a large unserved part of the population unable to pay the high prices demanded by Sky. He condemned Sky's decision to increase prices in response to the launch of BT Sport as evidence as being "based on a calculation that customers don't have anywhere else to go".

Calling on the regulator to investigate, he concluded: "We think Ofcom should heed the call of Sky's biggest shareholder. James Murdoch once said in relation to Sky that 21st Century Fox fought for 'a level playing field and to have competition policy applied with an even hand'. But when it comes to competition in pay-TV, the message from Sky seems to be 'talk to the hand'. We think Ofcom should make Mr Murdoch happy and give the UK a competitive pay-TV market that is fit for the next decade".