The war of words between British Sky Broadcasting and NTL, the cable group that is rebranding itself as Virgin Media, continued on Thursday as the scramble intensifies for customers among companies offering broadband, pay-television and telephony services.
Sir Richard Branson, whose Virgin Group is Virgin Media’s largest shareholder, said BSkyB’s dominance of the UK television industry was similar to the position British Airways held in its sector 21 years ago.
Jim Mooney, Virgin Media chairman, said that BSkyB overcharged for sport and movies on its pay-TV services. Virgin Media needs to pay the satellite television group in order to offer cable customers content such as Premier League football and programmes on other Sky channels.
Mr Mooney added that Virgin was “doing everything possible within the legislative system to address this problem.” He called for an “even playing field” in bidding for sports rights.
But BSkyB dismissed Virgin’s comments as “a predictable attempt to use regulation in the face of vigorous competition. Sky is successful because we focus on providing quality and value to our customers.”
Virgin Media is the first in the UK to offer a so-called “quad play” of telephony, pay-TV, broadband and mobile phone services, and is launching a marketing push following its rebranding.
Analysts are waiting to see whether the move will change the consumers’ perception of the cable group – sometimes referred to “NThell” because of its poor reputation for customer service – amid the “bundles war”.
Prior to the rebranding, Jeremy Darroch, BSkyB finance director, had said that a name change would not affect “the fundamental issues [cable] have like product development, customer service and price flexibility.”
The spat between the two operators came as BT Group on Thursday said that it had raised its share of the market for new broadband customers in the third quarter to 34 per cent, up from 25 per cent in the previous quarter and the highest level in more than two years.