* Q1 underlying revenue up 5 pct, in line with forecasts
* Customer additions picked up in Sept after slow summer
* Says mobile launch is close
* Shares flat
(Adds CEO comments, analyst reaction, shares)
By Paul Sandle
LONDON, Oct 13 European pay-TV group Sky
reported a 5 percent rise in underlying revenue in its
first quarter, in line with its expectations in a year when it
is paying substantially more for the premium soccer and
entertainment content it offer viewers.
The broadcaster, which had its most successful drama series
debut ever this month with "Westworld" and started Friday night
Premier League football this season, said its full-year target,
for 5-7 percent underlying revenue growth, was on track.
Sky added 106,000 customers in the three months through
September, less than 134,000 acquired in the same month last
year. Customer additions were slow in July and August,
reflecting in part a delay in the start of the German and
Italian football leagues, but had picked up in September, it
"We added customers at a good rate, albeit the quarter got
off to a slow start due to the tail end of Euro 2016 and the Rio
Olympics, both big free-to-air events," Chief Executive Jeremy
Darroch told reporters.
"But since then you've seen demand build across the quarter
and September was strong."
Sky, which operates in Britain and Ireland, Germany and
Austria and Italy, reported group revenue rose 7 percent to 3.1
billion pounds ($3.9 billion), with like-for-like revenue up 5
percent, in line with its forecasts.
It has cut costs to help absorb a 600 million pound increase
in its bill for English Premier League rights this year.
Darroch said the group had made a good start by cutting
operating costs by 2 percent in the quarter.
Shares in Sky have fallen 19 percent in the last 12 months
on concerns that the operator will be squeezed by telecoms
companies and over-the-top operators like Netflex - which offer
content over the Internet - while paying more for sports rights.
They were trading flat at 864 pence at 0824 GMT as analysts
at Morgan Stanley said the positives of a 5 percent rise in
underlying revenue and reiteration of guidance was countered by
disappointing customer growth in Germany and Britain.
Investors are awaiting the launch of Sky's mobile phone
service by the end of the year, the final service needed for it
to offer "quad play" bundles of TV, broadband, fixed-line and
mobile telecoms to customers.
Darroch did not give a date for the launch beyond saying it
was close, with final testing taking place. The company would
focus on getting the service right from day one, and then build
it up in the long term, he said.
($1 = 0.8042 pounds)
(Editing by Sarah Young and Susan Fenton)