[July 24, 2011] Business: Signs of BSkyB slowdown bring more bad news for investors Tweet (Observer (UK) Via Acquire Media NewsEdge) BSkyB investors reeling from the phone-hacking scandal are now bracing themselves for the first signs of a slowdown in the satellite broadcaster's recession-defying growth when it reports full-year results on Friday. Earlier this month, Sky promised to freeze prices for its TV, broadband and phone subscribers from September for at least 12 months. Some see this as the first indication its customers are finally feeling the pinch. Steve Malcolm at Evolution Securities identified some stumbling blocks to Sky's growth now News Corporation has withdrawn its takeover bid. These included the danger that watchdog Ofcom will decide the Murdochs are no longer fit and proper owners of a broadcast licence, forcing News Corp to sell its 39% stake. As digital switchover nears completion, Sky will compete in its most lucrative markets with Freeview's free service. "The price freeze is a typically proactive response from management, but may just be the first real sign of strain," said Malcolm. BSkyB's chief executive, Jeremy Darroch, is forecast to announce a rise in annual revenues of more than pounds 550m, to pounds 6.5bn. Sky is expected to have won 60,000 net new customers in its fourth quarter, down from 90,000 in the same period last year. Analyst Alex DeGroote at Panmure Gordon indicated earnings could be about to fall, and said: "It is disconcerting to see standalone growth forecasts being pared back already." Investors will be hoping for news on a special dividend, with Sky sharing some of its pounds 800m cash pile and perhaps increasing its borrowings to fund a payout. Analysts are predicting a total of between pounds 1bn and pounds 2.4bn. Pressure is mounting in the City for James Murdoch to step down as chair, amid questions over his knowledge of phone hacking. (c) 2011 Guardian Newspapers Limited. [ Back To TMCnet.com's Homepage ]