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Last Updated: Monday, 4 December 2006, 17:44 GMT
BT signs live football match deal
Footballers fighting over a ball
Broadcasters see football as a vital way of building their brand
UK phone company BT has announced a tie-up with Irish sports broadcaster Setanta that will allow it to broadcast live Premiership football matches.

The news comes as BT officially launches its new Vision television service, a move it hopes will turn it into a fully-blown multimedia company.

Setanta has rights for 46 Premiership matches for the 2007/2008 season.

BT's move will see its service compete against market leader BSkyB, which owns the rights to the other matches.

"BT is entering the pay-TV market as an aggressive price competitor, heavily targeting the home-video market," said James Healey, a senior analyst at Ernst & Young.

"With a 1,000-film library by next year and films costing 3 each at the most, it will strike fear into the hearts of high street video chains."

By the close BT's shares had added 0.8% at 290 pence.

Sporting base

Focusing on sports such as football, rugby and cricket has helped turn BSkyB into one of Europe's biggest satellite TV broadcasters and the dominant provider in the UK.

According to BT, the tie-up with Setanta and an existing agreement to show nearly live football matches means that its service will give customers access to 75% of the 2007/2008 season's Premiership matches.

BT said it will also show Scottish Premier League and Nationwide Conference games, as well as European matches and other sports such as golf.

The challenge remains, though: is BT trying to create a market that doesn't exist?
James Healey, Ernst & Young

The company explained that it "will be offering Setanta's new sports channel, Setanta Sports, from next summer".

BT said that while it was entering a similar market, it would be looking to attract customers that did not want to pay a monthly subscription but wanted more services than were available through a simple Freeview box and package.

The service will function through a set-top box, which is linked to the user's aerial and broadband. Users will be able to access more than 40 Freeview television channels and a library of films, music videos and TV shows.

BT said that about 50,000 customers had signed up for its Vision service, but that it would only have "thousands" up and running by the end of this year.

It expected to have 200,000 customers using the Vision service by the end of 2007, and eventually said it planned to sign up millions.

Slow start

Analysts questioned the size of BT's amibtions, but said that Vision may well prove popular with a significant range of consumers.

BT is looking at ways of boosting the appeal of its broadband internet services to offset a decline in its more traditional fixed-line phone revenues.

Along with cable companies and other phone firms, BT is looking to offer consumers a one-stop solution that would allow them to get their entertainment, internet and phone calls all from the same provider.

"BT Vision should help BT shore up its market share of broadband customers," said Ernst & Young's Mr Healey.

"It also enables BT to provide a solution for current Sky or NTL customers who don't want to pay a monthly subscription but want to occasionally watch premium content," he added.

"The challenge remains, though: with 40 free channels on Freeview, are consumers who don't have satellite or cable TV today willing to pay for any TV content, or is BT trying to create a market that doesn't exist?"


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