Reports that United Kingdom satellite TV giant British Sky Broadcasting is getting ready to launch a standalone broadband service internally dubbed “Picnic Broadband,” sound like a good idea to UBS Securities analyst Daniel Kerven, although he wasn’t quite so sure about the name.
Several British newspapers reported last week that BSkyB, the largest direct-to-home company in the U.K. with about 8.6 million subscribers, was contemplating launching the service to non-pay TV homes in an effort to gain market share from existing U.K. broadband providers like Carphone Warehouse and British Telecom. In a report in the Financial Times last week, a BSkyB representative wouldn’t discuss details but said that the company was “examining options to broaden access to the benefits and value that we can provide. However, no plans are confirmed at this time.”
Despite the lukewarm denial from BSkyB, Kerven wrote in a report that having its own broadband service would be a good move.
“While we are not sure about the name, we believe that this would make strategic sense,” Kerven wrote in his report. “Sky has made the investment in broadband/customer service infrastructure and can leverage off existing marketing spend.” He added that a broadband product would generate incremental revenue and provide the opportunity to upsell TV in the future.
“Importantly controlling [broadband] access to the PC, and in the future, the TV set, makes Sky well-placed to be the leading multimedia provider into the home,” the analyst wrote.