Strong operational
growth and record
financial results

Sky has delivered another year of strong operational growth and record financial results. Despite the tough economic environment, more customers are choosing more of our products than ever before with almost three million net product additions to reach a base of 28.4 million, up 12% on the prior year. We added 312,000 new households to reach 10.6 million customers, of which 32% now take our triple play of television, broadband and telephony.

Following good growth across all product categories, our customers are now taking an average of 2.7 products each, up from 2.5 a year ago and double the level of five years ago. ARPU increased by £10 on last year to £548, as the impact of this year's price freeze was more than offset by success in selling more products to new and existing customers. While the consumer environment remains challenging, customers are responding to the quality and value of our offering with churn for the 12 months of 10.2%, down on last year.

We delivered another good year in home communications as customers continue to choose Sky over other providers. We added 666,000 broadband customers, 667,000 telephony customers and 883,000 line rental products across the year. As a result, we closed the year with 3.4 million triple play customers – up 21% – and we are now the nation's favourite triple play provider.

We continued to extend our broadband network coverage, reaching 83% of the UK, bringing our high-quality, great value home communications products to more homes. To build further, this year we will launch Sky broadband and talk to the Republic of Ireland, making our full suite of services available to an additional 1.6 million homes for the first time.

We also continue to make good progress in unbundling. During the year, we migrated more than 900,000 customers to our own network and 69% of our on-net broadband customers are now fully unbundled, further improving the economics of our home communications business.

Our ‘Summer of Sport in HD' campaign in the final quarter, combined with the continued success of our Sky Sports F1 channel contributed to 521,000 HD additions across the year to reach 41% penetration of the total customer base. Multiroom benefited from successful marketing campaigns with 152,000 net additions in the year to reach 2.4 million customers.

Our continued focus on customer service is delivering meaningful benefits to the business. In the fourth quarter, average calls per customer fell by more than 15% year on year despite continued strong product growth and service visits to customers' homes to fix a problem were the lowest in eight years. These improvements reflect continued focus on even better reliability of our products and services and resolving customer issues first time, through increased training and moving more conversations in-house. Our focus on e-enablement deflected over six million telephone calls online over the course of the year and has led to sky.com being consistently our most popular sales channel. In June, Ofcom published their sixth quarterly complaints report in which we once again performed strongly with the fewest complaints of any provider in both broadband and TV.

Andrew GriffithChief Financial Officer

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