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Virgin Media 'loses' Sky

01/03/2007

Virgin Media has confirmed that its customers have lost access to basic Sky channels, after the two companies were unable to resolve a row over distribution fees before a midnight deadline last night.

In a statement issued today, Virgin Media chief executive Steve Burch said the company was "disappointed but not surprised" by the outcome of negotiations with their rival British Sky Broadcasting (BSkyB).

Virgin Media and BSkyB are competing in the highly competitive pay-TV, broadband and phone markets.

The two companies have been locked in an ongoing dispute over the renewal of an agreement governing the carriage of BSkyB's basic channels on Virgin Media, with the existing contract having expired last night.

Virgin Media claims that BSkyB was attempting to charge too high a price to allow access to its basic channels, including Sky One, Sky Two, Sky Sports News and Sky News on Virgin's pay-TV service.

It says that BSkyB's fees for distributing the channels have almost doubled, despite their popularity dwindling by a claimed 20 per cent over the past three years.

Having revealed that BSkyB had again rejected an offer for an "independent expert" to consider the dispute, Virgin Media, which was launched at the beginning of February following the merger of NTL, Telewest and Virgin Mobile, confirmed that its rival had withdrawn the basic channels from its service.

However, Sky's sports and movies channels are unaffected by the dispute and will continue to be available to Virgin Media customers.

Commenting, Virgin Media chief Mr Burch said: "We're disappointed but not surprised by this outcome: nothing Sky have said or done in the course of the negotiation indicates they had the slightest interest in doing a commercially viable deal.

"Their action here is consistent with their plans to withdraw their free channels from Freeview and, in our view, reflects their desire to limit consumer choice," he added.

Commenting on the withdrawal of their basic channels, which will mean that popular programmes such as Lost and 24 will no longer be available to Virgin Media customers, a spokesman for BSyB said: "We're disappointed that we will now be denied access to cable TV homes."



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