Customers are voting with their feet

Today is a big day in our financial calendar as we update the City on our business performance. With BT’s results following tomorrow and Talk Talk next week, it’s a busy time for those who follow the media and telecoms sector.  

So what do our results tell us? 

The first thing that stands out is that competitors have had very little impact on our growth. In the last three months of 2013, our product sales rose by more than 40% versus the same period of the previous year. This was our highest rate of organic growth for almost two years.

It’s also interesting to note what has happened in home communications since the launch of BT Sport. While there was some speculation that our growth would dry up, the reality has proved to be very different. In fact, we added broadband, home phone and line rental customers at an even faster rate between July and  December than in the previous year. It seems that plenty of people are still prepared to switch for the right combination of quality and value.

If we step back from the cut and thrust of current trading, it’s revealing to look at the longer-term context of market trends. The charts below show that,  over the last five years, around 4.7m customers have switched  their home phone line to Sky.  Over the same period, more than 6 million have left BT. 

[Consumer lines graph]

The financial trends are equally marked. As more customers join Sky and take more products from us, we’ve added more than £3 billion of revenue since 2009 and increased EBITDA, a key measure of profitability, by more than £700m. 

[EBITDA graph]

[Revenue graph]

With this backdrop, it would be surprising if competitors didn’t respond by trying new things in an attempt to turn the tide. While these moves can grab the attention, often it’s the underlying momentum of businesses and their growth trajectories that can provide the reasons why.

Customers are voting with their feet and the opportunity for our business is opening up. As well as continuing to grow our existing subscription products, we have more ways to reach customers than  ever before. In 2014, we’re going to keep developing our internet TV service, NOW TV, as a new way for the 13 million Freeview households to upgrade their home entertainment. And we can build an entirely new business in movie rentals and transactions through Sky Store, as the market continues to shift from physical DVDs to digital downloads.  With all of these multiple services and platforms, for the first time we see a broad and growing opportunity of ‘Sky for Everyone’.