Sky, in its press releases has been trying to justify its increase in price to Virgin Media, due to the amount of investment, Sky claim to have spent on its channels. However, Virgin Media state that Sky’s investment has failed due to the decline in popularity, each year for the last three years. VM state that Sky wants to be ‘rewarded’ for apparent failure.

Also, in the morning edition of the Daily Telegraph, BSkyb had made claims that it was to offer concessions and a new annual price of 90 pence per subscriber, or £32.4 million, for carriage of its basic channels on Virgin Media’s network.

Virgin Media states:

“Sky is blatantly misrepresenting their offer, which specifically provides for a minimum guaranteed annual payment that is twice the current annual payment. Under Sky’s proposals, there are no circumstances under which Virgin Media would pay anything less than this doubled amount. The pence per subscriber figure they quote is simply not applicable because of the minimum guarantee.

Sky wishes to double the cost of the existing arrangement for a portfolio of channels whose popularity has declined by 7 per cent every year for the past three years. Moreover, Sky has demanded that Virgin Media remove their basic channels from our entry level TV package (which is available for free with any other Virgin Media product). This means that, even were terms agreed, Virgin Media would be forced to deprive a significant proportion of their subscribers of Sky’s basic channels. This is nothing short of an attempt to stop Virgin Media giving consumers a better deal so that Sky can maintain their monopolistic position in the market.

We find this selective use of facts disingenuous and misleading, but hardly surprising. It confirms our view that Sky have no intention of agreeing a deal on sensible commercial rates and that a withdrawal of these channels is an outcome which they are deliberately trying to engineer in order to suppress competition.”

Virgin Media say they will accept a genuine and realistic arrangement from Sky, any point up to expiry of the existing contract.

Virgin Media’s Chief executive, Steve Burch, said:-

“The latest offer from Sky is nothing more than smoke and mirrors. They continue to demand a price for their basic channels that demonstrates a determination to use their market power to bully competitors and enforce pricing that bears no resemblance to commercial reality”

Our Cable Forum poll, of which nearly 500 people have cast their votes, shows overwelming support for Virgin Media by its customers. 82% of the near 500 voters, would not switch to Sky, should the Sky channels disappear.

Repeated views on our forum seem to be that some VM customers simply wouldn’t miss Sky’s basic channels, should they go and that Virgin Media should stick to their guns.

• Read Virgin Media Press Release in Full.