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Rigorous Fearless Independent

Julian said "Sky is planning a massive marketing campaign for Sky Glass over the next three months, which takes us to Christmas, and Sky will be keen to see this launch succeed, so no doubt it’ll encourage its existing customers to upgrade wherever possible. That said, although this is a huge product launch, Sky doesn’t really need to rush to switch its customers over from satellite."

He added "Given the typical replacement cycle for a TV set is over 5 years (and perhaps up to 8 or 10), if someone has bought a brand new set in the last year or two then it might be a while before they wish to splash out on another. As a result, there are many years left for satellites."

Press reports that Sky is in advanced talks to co-invest in Virgin Media O2’s upgrade of its cable network to full fibre are something of a surprise, with a host of issues for both parties to carefully consider

The muted deal would be somewhat negative for BT (although limited by Sky’s c.15% market share in VMO2 areas and regulatory protections/upsides). It is, however, a stark reminder of the precarious economics of alternative networks such as CityFibre

Whether this makes VMO2 more likely to extend its network further is a more critical issue, certainly for BT

 

James said there will come a point when the fixed cost of satellite deployment outweighs the income from customers, but that was still “many years away”.

“There is a good example in Spain where Telefonica – the BT of Spain – had an IPTV service. It merged with Canal Plus’s Spanish satellite TV service in 2015. It brought across all the content and immediately shifted the focus to IPTV. After they merged it was about 37pc satellite. But five years later, satellite still has an 11pc share with around 400,000 customers.”

"Certainly the fault is with Telecom Italia,” says François, who thinks that the streaming snags are solvable in the long run.

“It’s just that [at present] it doesn’t look good, commercial wise marketing wise,” Godard adds, noting that “when you have technology problems, people don’t rush to buy your product.”