BSkyB to launch broadband service later this year

LONDON - BSkyB will launch its broadband service, offering sports and movie downloads, later this year. The move comes after the company bought internet service provider Easynet for £211m at the end of 2005.

BSkyB, which is 37% owned by News Corporation, said it was preparing its broadband service to offer video-on-demand, voice calls and television over the internet to its customers.

Andrew Griffiths, head of investor relations at BSkyB, has said its broadband service will be fully operational by the second half of the year. The package offered is expected to cost customers around £200.

BSkyB remains confident that the acquisition of Easynet will not unduly affect its share prices, anticipating that the new broadband service will attract in the region of 500,000 sign-ups.

Philip Guest, analyst at Exane BNP Paribas, told Reuters: "We had anticipated a flurry of downgrade activity following the release of even limited financial information.

"Now we believe that any downgrades, which are in any case expected by the market, will be spread out over the next weeks and even months, significantly reducing the catalysts for any immediate volatility in the share price."

However, critics of the proposal have suggested BSkyB's investment in Easynet has a touch of the "jam for tomorrow" element.

Shares in BSkyB are up 0.3%, or 1.8p, trading at 533.5p.

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