Consumer 'never had it so good' says Murdoch

The Competition Commission is likely to tell the satellite broadcaster it must sell all or part of the 18% stake it bought for £940 million a year ago, but Murdoch claimed the British consumer has never had more choice.

The BSkyB chairman, who is a 39% shareholder through his News Corp, told shareholders at today's annual meeting: "Competition is great for consumers. History has shown that it is competition and free markets which deliver real, sustainable value."

BSkyB chief executive James Murdoch has offered to put some of the ITV stake into an independent trust to cut the group's voting rights to less than 15%. That was rejected by rival Virgin Media, which believes Sky should be forced to sell its entire stake. If that were to happen, Sky would take a loss of more than £200 million.

Sky effectively blocked Virgin's plans to merge with ITV last year, and has since taken its basic channels off the cable firm's network. That has cost it about £15 million of profit each quarter.

Murdoch Snr said: "Our beliefs are simple but powerful. We believe in better. Better choice for our customers, better quality for our customers, better service for our customers and better value. British consumers enjoy better choice, better quality and better value in entertainment and communications than ever before. This is a direct result of the dynamic and competitive market place that Sky has helped create."

Sky added 83,000 customers in the first three months of its financial year, taking the total to 8.66 million at end-September. That was better than most City forecasts and included good growth in customers choosing premium services such as Sky+ and high-definition.

Operating profits fell 21% from £180 million to £143 million as Sky spent on its move into broadband. It said this week that, just over a year after launch, it has more than a million broadband customers, but at a cost of £57 million in the latest quarter. Profits were also affected by higher costs for Premiership football and the Virgin spat.

Murdoch said this change was vital to Sky's future: "We are no longer simply a broadcaster and pay television operator. We are also the UK's fastestgrowing broadband and telephony operator. These are the clearest signs of Sky's transformation into a fast-growing entertainment and communications company.

"The strength of our financial model is already delivering accelerated topline growth thanks to the increased opportunity we now have as a result of our expanding product range. I believe Sky has never been better-positioned for future growth than it is today."

First-quarter revenues rose 11% to £1.18 billion. Churn - the measure of how many subscribers are switching off - fell for the fifth consecutive quarter to 11.3% moving towards James Murdoch's stated target of 10%.