2nd UPDATE: BT Outlines Competitive TV Football Prices

(Adds BSkyB comments and other details) By Lilly Vitorovich Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Disgruntled football fans in England finally have something to smile about after telecommunications firm BT Group PLC (BT.A.LN) Thursday outlined competitive subscription rates to watch Premier League football matches on its pay-television service. BT Vision customers will be able to receive Sky Sports 1 and Sky Sports 2 channels, which are owned by British Sky Broadcasting Group PLC (BSY.LN) and show the majority of the Premier League football matches, for GBP16.99 a month from August. If customers only want one of the Sky sports channels, it will cost them GBP11.99 if they subscribe to a new 12 month broadband and BT Vision contract. But if they chose a bundle of broadband and calls for 24 months, they will get the channels for GBP11.99 a month. At present, BSkyB doesn't offer just Sky Sports 1 and 2 channels to customers. Instead, both channels are included in BSkyB packages. "Football fans will be cheering our new prices, which mark an end to paying for basic channels when you only want the sport," BT Retail Chief Executive Gavin Patterson said in a statement, although he declined to say how many new customers BT hoped to attract. Around 4 million people in the U.K. would like to sign up for Sky Sports channels, but felt they were too expensive, according to research by BT. BT Vision has around 480,000 customers in the U.K., while BSkyB has around 9.8 million. There's no love lost between the two, with BSkyB Thursday announcing a GBP3 increase in its retail prices due to "increased investment in Sky Sports," which will show 25% more Premier League matches from the new football season, which kicks off Aug. 14. The wholesale price, which U.K. communications regulator Ofcom ruled should be linked to the retail price, will rise to GBP19.07 from GBP17.14 a month. "BT will make a big noise about a couple of channels but they may find that customers value a much wider choice of viewing," said Mike Darcey, chief operating officer at BSkyB. BSkyB offers five Sky Sports channels, extensive HD (high definition) viewing and "dozens of other high-quality channels", he noted. Liberum Capital analyst Mark James described BT's prices as "pretty compelling". "I think it will be well received," said James. BT's deal with BSkyB follows a ruling by Ofcom in March that BSkyB must supply its sports channels to rivals at a wholesale price set by Ofcom. BSkyB challenged the ruling and agreed a deal with Ofcom two months ago, whereby the wholesale pricing structure will initially apply only to BT Vision, Virgin Media Inc. (VMED) and Top-UP TV. Until the outcome of BSkyB's appeal, the difference between the Ofcom regulated price paid by the three parties, and the prevailing rate card price that Sky charges will be paid into escrow. At the conclusion of a full appeal by BSkyB, the Competition Appeal Tribunal will determine the distribution of the money held in escrow. At 0857 GMT, BT shares were down 3 pence at 127 pence, while BSkyB shares were down 2 pence, at 699 pence in a lower London market. Virgin Media shares were steady at 1125 pence. News Corp., which owns Dow Jones & Co., publisher of this newswire and The Wall Street Journal, holds about a 39% stake in BSkyB. -By Lilly Vitorovich, Dow Jones Newswires; 44-0-207 842 9290; lilly.vitorovich@dowjones.com (MORE TO FOLLOW) Dow Jones Newswires July 01, 2010 05:31 ET (09:31 GMT)