BT Sport fears sees telecoms group share price slide
Investor concerns over whether BT may have overestimated the size of the market for its sports television channels have seen the telecoms firms share price slip 1.3 per cent.
This follows a decision by UBS analysts to cut their recommendation to ‘sell’ after concluding that they did not believe ‘the addressable market is as large as the company thinks’ for such content – raising the spectre that BT could fail to recoup its investment.
BT is currently engaged in a head to head battle with BSkyB in the sector, offering its broadband subscribers free access to the sports service as an incentive but this offer has only been taken up by 30 per cent of users.
In a statement UBS said: “BT is set to invest an estimated £450m, or 15-25 per cent of cash flow, per annum to create BT Sport and update its BT TV service. We worry it will not be recouped as current take up remains weak.”
Analysts fret that BT may end up having to stump up even more to woo existing Sky subscribers, kicking off a price war between the two providers.