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Wednesday, February 10, 1999 Published at 09:01 GMT

Business: The Company File

BSkyB winning digital race

The sky's the limit for Rupert Murdoch's digital service

Satellite broadcaster BSkyB has stolen a march on its rivals in the digital TV race, but has paid the price on its balance sheet.

BBC News' John Moylan: BSkyB's digital future still uncertain
The company says it has signed up 350,000 subscribers to its Sky Digital service in the four months to January since its launch, comfortably ahead of the 60,000 subscriptions sold by its rival, On Digital.

However, the heavy investment in its new digital service saw BSkyB's profits fall sharply.

[ image: Mark Booth:
Mark Booth: "Superb start"
Its first-half pre-tax profits came in at 53.2m ($87m), down 58% on the same period last year. Analysts had expected the blow to profits but said the fall from 128.6m was bigger than expected by some.

The big costs of setting up and marketing the new 100-channel digital service now appear justified by the larger-than-expected growth in take-up and is likely to please the share market.

BSkyB's shares were up 28 pence higher at 441p by 0920 GMT in buoyant trade against a weaker trend in the overall market.

New 1m target

The company has now set a new target of 1m digital subscribers by October, the first annniversary of its digital launch.

It had set a target of 200,000 by 31 January and has exceeded this by 75%. It said 120,000 of its digital subscribers, or 34%, were new Sky customers.

"Sky Digital is off to a superb start. Given the fast take-up rate, combined with customer satisfaction which scores 25% higher than for the analogue service," BSkyB's chief executive Mark Booth said in a statement.

The broadcaster has also announced a deal with Internet provider America Online (AOL) to supply to it the Sky Sports website and other content. In return AOL will market Sky Digital to its own subscribers.

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