John Hutton will tomorrow announce his decision on what is to be done with regards to the 17.9 per cent ITV stake owned by Sky.
The Competition Commission earlier advised that Sky hold no more than 7.5 per cent of ITV, but the Business Secretary has the last word on the matter, though he is expected to follow the Commission’s recommendation.
ITV shares have now reached a new low, for which the controversy surrounding the Sky stake is partially to blame. This, ironically, will see Sky suffering a significant loss even if they are only forced to make a partial sale. Last Friday, ITV shares were valued at 72.9p, compared with the 135p a share that Sky paid at the time of purchase.
Since the launch of Virgin Media last year, the gestation of which prompted the Sky ITV share spree, we have seen the cable group greatly stimulate growth and competition in the market place. The launch of Virgin’s 20Mbps services paved the way for ADSL2+ from the likes of Be, O2 and UK Online to do the same.
Virgin’s arrival in the market also saw providers adding increased value services, such as digital TV and mobile phones – BT and Tiscali both pushed to drive customers to their IPTV platforms in 2007 and Sky had a wildly successfully year with See Speak Surf.
All this talk about cable has also stimulated debate about the future of telecoms networks in Britain – BT, along with Virgin, have been trialling next-gen cable services in the south of England, and so-called Dark Fibre pioneers H20 Networks are keen on leading the way by routing 21st Century cable networks through 19th Century sewer ducts.
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