Virgin Media pulls Sky’s basic channel package

Virgin Media has pulled Sky’s channels, including Sky One, from 3.35 million households after failing to reach an agreement with rival BSkyB over the terms of a carriage deal.

Sky’s contract to provide basic channels – including Sky One, Sky Two, Sky Sports and Sky News – expired at midnight without a deal in place following a bitter dispute over price.

Virgin Media plans to alter its service so its recently launched video-on-demand channel will appear on channel 120 in place of Sky One.

The dispute entered the public arena last week after Virgin Media chief executive, Steve Burch, attacked Sky for its negotiating stance over how much Virgin pays for its content.

Sky defended its role in the negotiations saying: “We’ve made repeated efforts to reach an agreement but Virgin Media has rejected all of our proposals – including our latest offer of just 3p per customer per day.”

A Sky spokesman adds: “Six frustrating days have passed since Virgin Media last put forward financial terms for a proposed agreement to Sky.”

Under the terms of the previous contract, Virgin Media is understood to have paid the satellite broadcaster around £25m to carry the Sky channels but claimed it wanted to “virtually double” the price of a new two-year deal. Sky refutes the claims.

Virgin Media, which this week reported widening losses after major restructuring, admitted the Sky switch-off could cost it more customers.

†