Sky TV has revealed details of its long-promised internet service - which has been launched today for a "small group" of customers ahead of a wider rollout to all-comers in the months ahead.
For $79 a month on a minimum 12-month term, Sky Broadband will offer unlimited data over a one gig (that is, very high speed) UFB fibre connection.
While $79 is not the cheapest price on the market, by a long shot, it is a very keen price for unlimited data and top-shelf speeds. Sky promises download speeds up to 900 megabits per second and upload of 400Mbps, plus a router with the latest WiFi technology - WiFi 6 - and wifi extenders if they're needed to boost the signal around your house for an extra $10 per month. An optional voice line will cost another $10 per month plus calling rates. Depending on your fibre setup, there could be a DIY option available and no setup costs (see FAQ here).
The industry standard for such a high-speed unlimited data plan is around the $100 mark.
Sky says it will detail further plans shortly.
"We know not all our customers' needs are the same, particularly those with smaller homes or lighter broadband usage needs. There will be other plan options and we will roll these out soon," a spokeswoman said.
Spark and Vodafone have recently been in a price war that has seen wireless broadband (fast internet delivered into a home via a mobile network) offered for as low as $40 per month.
Sky is offering fibre service only, although it points out fibe is now available to some 84 per cent of the country. All towns and cities will get UFB fibre if they haven' already, but the rollout stops short of most rural areas.
Sky decoder customers only - at least at launch
Sky Broadband will initially be available to customers with at least Sky Starter only - that is, only its satellite customers. At this point, customers to its streaming services Neon, Sky Sport Now and Rugby Pass are excluded.
A spokeswoman said the broadband offer would be extended to all-comers in the coming months but that "Sky customers will receive a preferential offer" - confirming analyst speculation that Sky will use low-price broadband as a mechanism to keep customers loyal and draw new subscribers to its content.
The pay-TV broadcaster is partnering with Vocus (owner of Orcon, Slingshot and Flip) to deliver its new service. Vocus also provisioned the initial version of the short-lived Stuff Fibre (which the publisher ended up selling to Vocus).
Former Sky CEO Martin Stewart wanted a direct partnership with UFB operator Chorus, and said it was "only a matter of time" before Sky offered mobile phone service too.
New Sky boss Sophie Moloney has tempered the pay-TV provider's telco ambitions, however, choosing the lower margin but also lower-risk route of a partnership with Vocus for broadband, and nixing the mobile service plans.
Looking for stickier customers, who spend more
Sky recently reported a 234 per cent jump in net profit to $39.6 million for the six months to December 30, in line with guidance, on the back of an 80 per cent spike in its streaming business, a stabilisation of its satellite business and cost-cutting.
Total customers jumped 17 per cent from 794,000 a year ago to 927,000 as Sky box numbers slipped 4 per cent versus the year-ago half but streaming customers jumped from 196,000 to 352,000.
But although Sky had more customers, they were spending less.
Average revenue per user per month for Sky box customers fell from $83 a year ago to $79.
Average revenue per user per month for streaming customers fell from $26 a year ago to $18 after troughing at $16 in the second half of FY2020 with the Lightbox merger.
Bundling broadband with its service is seen not only as a way for Sky to reduce churn in its satellite business, but to boost average revenue per customer across the board - thereby reversing its long revenue decline.
Sky shares were up 1.72 per cent to 18c in midday trading.