Broadcaster sees falling profits as it battles to attract broadband customers

British Sky Broadcasting (BSkyB) profits have fallen 28 per cent in the first quarter due to broadband price wars with rival Virgin Media.

BSKyB's income for the three months to September was £84m, down from £116m in the same quarter last year.

Uptake of the broadband service bundled with BSkyB's TV package has been rapid. More than a million customers have signed up to the service since it was launched 14 months ago.

Around a third of subscribers are new Sky TV customers.

BskyB is involved in a battle with Virgin Media for broadband and premium TV customers.

Earlier this week Virgin Media chief executive Neil Berkett said the group is switching focus from the premium TV market to a trial of superfast broadband speeds in a fresh bid to attract customers away from BSkyB.

Relations between the two companies have been sour since BSkyB's move to buy 17.9 percent of commercial broadcaster ITV last year, blocking any possible move on ITV by Virgin Media.

Virgin Media stopped airing BSkyB's basic channels in March.