BSkyB plans to invest 400 million British pounds ($731.7 million) throughout the next three years to develop its broadband business, the company announced July 18.
BSkyB will offer three tiers of service, including a free basic package with speeds up to 2 megabits per second and two pay packages that will offer customers higher speeds. The Mid package will provide speeds of up to 8 megabits per second for 5 pounds per month ($9.16), while the Max package will offer speeds of up to 16 megabits per second for 10 pounds per month ($18.29).
“In our view the strategy is attractive, and although we expect the broadband market to be very competitive going forwards, we believe that BSkyB should be able to carve out a substantial, and very profitable, position,” Paul Richards, a media equity analyst at Numis Securities said in a research note. ” … We had not expected a tiered service, but rather had assumed a max type service for premium Sky World packages. We believe the range of packages is attractive, and are encouraged that these services will be available to subscribers at all tiers.”
