BT (BT -0.3%) signs a 3-year wholesale deal with Virgin Media to provide its sports channels to Virgin's subscribers. Customers with Virgin's top television package will receive the channels for free, while those with lower-tier packages will have to pay £15/month.
The agreement improves the competitive position of both companies in a marketplace dominated by Rupert Murdoch's BSkyB. BT will triple its BT Sport audience in a single stroke by adding Virgin's 2M highest-paying subscribers. Virgin Media will hold the unique position of being the only pay TV provider that offers both BT and BSkyB's sports channels under one subscription.
BT has refused to strike a similar deal with BSkyB. In Aug., British regulator Ofcom rejected BT's request to force BSkyB into wholesaling its own sports channels. Ofcom will conclude a full investigation by late 2013.
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