BT plans TV deals to hit back at cable
By Richard Baum, Reuters
27 June 2001
British Telecommunications Plc is poised to offer combined telephone and television packages with ONdigital and Sky, industry sources said on Tuesday.
The move will intensify its fightback against cable operators NTL Inc and Telewest Communications Plc, which have been winning customers by offering a telephone line and multi-channel TV for about the same price as a BT line alone.
BT will offer special tariffs to ONdigital and Sky customers under a marketing arrangement between the companies, the sources said.
Asked if BT planned such a deal, Pierre Danon, chief executive of its retail arm, told Reuters "to wait until July 11". The company planned an announcement to build on research showing a BT line plus an ONdigital or Sky subscription was cheaper than a cable package once call prices were taken into account, he said after a BT news conference.
He refused to comment further, but industry sources said BT was close to signing deals with ONdigital, owned by Carlton Communications Plc and Granada Plc, and British Sky Broadcasting Group Plc.
ONdigital, to be renamed ITV Digital next month, would not comment. A BSkyB spokesman said the firm always talks to BT but declined to comment further.
BT, Britain's dominant fixed-line operator, has 21 million retail customers but has lost millions to the country's two cable operators. Telewest is luring customers with an entry level package costing 9.60 pounds ($13.60) for a telephone line and 11 digital TV channels, compared with 10 pounds ($14.15) for a BT line on its own.
BT has commissioned research from auditors Deloitte & Touche that shows its phone bills are up to 24 percent cheaper overall than those of the cable companies and other operators, thanks to free call allowances in its BT Together and BT Talk Together packages.
Deloitte has now produced figures showing the cost remains cheaper when an ONdigital or Sky subscription is added in.
Danon was speaking after unveiling a new advertising campaign as part of BT's efforts to hang on to customers.
The commercials feature a stadium of 500,000 simulated people representing a connected society, produced by the special effects team behind the Oscar-winning film Gladiator.
Danon has been revamping BT's retail strategy since joining the company from Xerox Corp. last September. |
