According to the latest figures released by the U.K. telecoms regulator Ofcom, digital satellite had just more than a 50 percent share of the digital television market at the end of 2004. While BSkyB continues to perform strongly and sets the pace for satellite pay-TV operators in Europe, it is likely that at some point in 2005, digital satellite will fall to under 50 percent share of the digital TV market in the United Kingdom. To put that in perspective, at the end of the second quarter in 2003, digital satellite accounted for about 65 percent of the market. The reason for satellite’s decline has been the phenomenal growth of the Digital Terrestrial Television (DTT) alternative, Freeview. At the end of the second quarter of 2003, Freeview had just about 16 percent marketshare in digital television. This rose to more than 31 percent at the end of 2004. At the end of 2004, according to Ofcom, there were more than 4.5 million Freeview homes in the United Kingdom. At its current rate of growth, it could overtake BSkyB as the leading digital television operator/platform in the United Kingdom in the next two years.

However, BSkyB is still performing strongly and it is still confident that it can reach its forecast of having eight million subscribers at the end of 2005, which would be a fine achievement.

While Freeview has been a big winner in the United Kingdom digital television market, cable operators have made little headway. According to Ofcom, cable has a 17 percent share of the digital market at the end of 2004. At the end of the second quarter of 2003, it had more than 19 percent marketshare.