Ofcom tells Sky to lower wholesale prices

The Office of Communications (Ofcom) has told Sky it must lower the price it charges to rival cable, terrestrial and internet broadcasters to air its premium sports channels.

The broadcaster has been forced to sell its Sky Sports 1 and 2 channels for up to 23% less than the current wholesale price.

The inquiry into overcharging on digital TV services has been active for three years now, and the new cuts are expected to give viewers a better choice of pay TV services.

Sky did not welcome the move and has said it will appeal against the "unwarranted intervention", arguing it would be to the detriment of consumers.

"This is a marketplace where customers are well served with high levels of choice and innovation," Sky said.

"Consumers will not benefit if regulators blunt incentives to invest and take risks."

Sky will now have to sell Sky Sports 1 and 2 for £10.63 per channel per month - 23.4% less than at present, and if the two channels are sold together, Ofcom has set a reduced price of £17.14 – with a discount of 10.5% on current wholesale charges.

However, bodies representing sports that appear on the channels, such as rugby, football and cricket rely on lucrative TV rights deals and are concerned that the proposals will have a negative effect on the amount of money going into sport.

A spokesperson for the English Premier League said it was "very disappointing" and was studying the findings carefully.

BT said it hoped to be able to offer Sky Sports 1 and 2 at a cheaper rate than Sky in time for the beginning of the next football season.

But it added: "Ofcom should have gone much further than it did.

"They should have included all Sky Sports channels, not just two. The wholesale price for the two sports channels is higher than the regulator had previously suggested."

Sky has also been granted permission to provide pay-TV services on Freeview as part of what could be a major restructure of the pay-TV industry, replacing the current free channels offered by Sky.

The move could provide 10 million Freeview-only homes with access to premium sport such the Premier League for the first time.

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