Sky believes in a better return from its operation in Ireland
Chief executive Jeremy Darroch says the satellite broadcaster wants to do more in what he describes as a ‘great, great market’
“Believe in Britain” is the slogan on the business card handed to me last Friday by one of the Sky team who accompanied chief executive Jeremy Darroch to Dublin for the opening of the broadcaster’s impressive new corporate headquarters here.
The expansion is a statement of intent by the satellite broadcaster. About 900 new jobs to begin with, an investment of €1.5 billion over five years, and the imminent launch of broadband and home telephone services.
Twenty-four years after its launch, Sky is really starting to “believe” in Ireland. Some wonder why it has taken so long for it to make such an investment in Ireland.
Sky doesn’t publish turnover or profit figures for its Irish operation. Some years ago, it even stopped releasing the number of subscribers it has here.
But the consensus within the industry is that it makes a lot of money from this market.
In a speech at the official launch of the offices, which was attended by Taoiseach Enda Kenny, Darroch stressed how Ireland has been a “great, great market” for Sky over the years.
In our interview, Darroch confirms the business here is profitable and “performing well”. Even in the recession, it has continued to grow and the average spend by customers is up, he says.
So why has it taken until now to build a presence – it previously had about 50 staff here – on the ground?
“When the business was set up [in 1989], Sky for many years was successful but losing money,” he explains. “Its history was one of significant investment and early stage losses.
“We ran Ireland as an offshoot of the UK and that was working. There was nothing wrong with that as a business.
“My own view was that, for us to take the next step over time here, we really needed to build more of an on-the-ground presence. The launch of broadband is a good opportunity to do that because we can see our business re-scaling here over the next few months.”
Sky’s funky new offices – there’s a pool table, table tennis, lots of glossy sports murals on the walls and even a faith room – will act as a customer contact centre and a sales office. These functions were previously carried out by in-house staff in Scotland and third-party service provider Abtran in Co Cork.
The push into broadband and home telephone services helped persuade the listed company’s top brass that it was time to take these activities under its direct control from two floors of a large modern office block on Burlington Road.
The broadband and phone products will launch in February after a number of months of pilot testing with a closed group of about 300 customers.
A chat forum on Sky’s Irish website indicates that those who participated in the trial were offered one-year contracts at knockdown prices.
They could avail of unlimited broadband for €10 a month and landline calls to Ireland and some other destinations for €7.50 a month.
What will it charge for its triple play – TV, broadband and telephone – service when it goes live in February?
“We haven’t announced the price yet. We’ll hold all of that for the consumer launch but, look, it will be attractive, as always.”
Darroch says Sky wants to achieve significant scale with its broadband launch.
“So we have to make sure we have the right price and the right value proposition.
“It’s going to be a long game and hopefully a tale of growth for us for many years.”
Sky is no novice when it comes to broadband and telephony, having launched broadband in the UK six years ago.
Today, it has 4.1 million broadband customers in the UK, of which 3.5 million are taking its triple-play offering.
That’s roughly one-third of its overall 10.6 million subscriber base for Britain and Ireland.
According to figures from Nielsen, there are more than 700,000 Sky set-top boxes in the Republic, although not all of these would have active subscriptions.
What target has Darroch set for the Irish business?
“No specific targets that we’re disclosing today,” he says. “The job is to get to market, start to build success and to go from there.