All go for new digital service

By SIMON HENDERY

Loss-making Sky Television says it has stopped subsidising digital upgrades for existing UHF customers, after reaching the critical mass it needs to make its long-touted interactive television service viable.

Sky has 270,000 digital subscribers and 160,000 others signed up on its UHF service.

After months of delays, the company said yesterday that it planned to start offering its digital customers an interactive service, initially featuring weather and games, within weeks.

A television-based e-mail service will be available about three months after that.

Chief executive John Fellet said the company had been working hard to iron out technical bugs before launching its interactive service. The exercise had been like "changing your tyres while the car is moving at 40 miles per hour".

Sky yesterday reported a June year loss of $42.3 million, compared with a $27 million loss last year.

But analysts and the company's majority investor, INL, remained upbeat about Sky's growth-focused direction.

Subscription revenue grew 21 per cent to $248.3 million for the year.

Sky faced significantly higher programming costs during the year because of the lower value of the New Zealand dollar, but increased its earnings before interest, tax, depreciation and amortisation by 2.2 per cent to $75.7 million.

Depreciation of $95 million and debt financing of $21 million took their toll on the net result.

Mr Fellet said last month was the company's best ever for pay-per-view revenue. The David Tua boxing bout against American Chris Byrd helped it pick up more than $1 million in pay-per-view fees.

Yesterday, Sky signed a deal with broker JBWere over a pending capital notes issue, but Mr Fellet said he could not give details until the prospectus was registered with the Stock Exchange today.

Sky shares fell 1c yesterday to $3.50.