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Ovum comments: BT looking to break the bundle

(PresseBox) (London, ) In a perhaps surprisingly, bold step, BT is offering the two new BT Sports channels (in which it has invested over £1 billion in distribution rights alone) free to its broadband customers.

Jonathan Doran, principal analyst at Ovum comments:

"As these channels will also be available via the BSkyB satellite platform, this means that Sky TV customers will be able to receive BT's sports offering, including premiership football and rugby amongst others, for free as long as they stick with, or migrate to BT broadband. With Sky currently the most aggressive of BT's competitors in the fixed voice and broadband markets - this is a judicious strategic move which, with substantial TV marketing ready to go live today, should prove a successful ploy for BT.

"The BT Sports offer marks a significant departure for BT from its previous TV service positioning. The unbundling of affordable access to premium sports content from regular pay-TV subscriptions is a move that will be attractive to many consumers. This, coupled with the subsidized sports offer for broadband customers will certainly help BT consolidate its leadership in the retail broadband access market. As well as defending its broadband business, it is also important for BT to increase its own TV market share, as this will drive much-eeded additional ARPU growth. BT will be hoping that, backed with a big marketing campaign, the new BT Sports channels (which are also free to BT TV customers) will drive greater take pay-TV up.

"However, Ovum believes BT's TV strategy remains muddled, with two distinct brands still cluttering its messaging and some unclear benefits listed attributed to its various TV packages. Much work is therefore needed to simplify the offering and drive home the advantages of BT's TV service over that of the competition."

Ovum

Jointly awarded IIAR Global Analyst of the Year 2012, Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Its research draws upon over 400,000 interviews each year with business and technology, telecoms and sourcing decision-makers, giving Ovum and its clients unparalleled insight, not only into business requirements but also the technology that organizations must support. Ovum is an Informa business.