BSkyB today revealed it is winning new subscribers at a record rate as it continues to benefit from the fall-out of its ongoing dispute with rival Virgin Media.

The pay-TV broadcaster said that it had signed up an all-time high 349,000 subscribers in the three months to June 30, up 20 per cent on a year ago. After taking account of defections in the quarter, net new customer additions were 90,000, above the vast majority of City forecasts, taking BSkyB’s total subscriber base in the UK up 17 per cent year-on-year to nearly 8.6 million.

A trading update from the group showed that it had also achieved its target of signing up more than 700,000 broadband customers by the end of its financial year.

The number of Sky Broadband customers increased in the quarter by 259,000 to 716,000. Nearly two thirds of BSkyB subscribers now take another service, such as broadband or telephony.

James Murdoch, BSkyB's chief executive, said: “Our transformation continues to gather pace.”

Shares in the group, 39.1 per cent owned by News Corporation, parent company of The Times, rose 9p to 681p, a new three-year high in early trading.

Analysts said that a key factor in the rise was an improvement in BSkyB’s churn rate — the rate at which customers cancel their TV subscriptions. BSkyB said that annualised churn had fallen to around 12.1 per cent, against 13.7 per cent in March, despite the phasing out of some price reductions.

One dealer said: “The early read is really good, especially due to falling churn.”

BSkyB was expected to reveal a steep rise in subscriber numbers given the number of Virgin Media customers signing up following the two company’s dispute over carriage fees.

This saw BSkyB pull stations such as Sky News and Sky One, home to the popular shows 24, The Simpsons and Lost, from Virgin Media’s cable platform at the end of February.

Virgin Media revealed in May that it had lost 50,000 customers as a result and expected to lose more.

The group is suing BSkyB for damages over the dispute, arguing that its rival abused a “dominant position in pay-TV” when it asked for more money for broadcasting the channels, a claim denied by BSkyB.

Virgin Media, which last week revealed it was considering a takeover bid from Carlyle, the US private equity group, has also led the criticism of BSkyB’s decision to buy a 17 per cent stake in ITV last November.

The move thwarted Virgin Media’s own plans to take over ITV.

The Competition Commission is investigating the stake purchase and is due to report its findings to the government in four months’ time.

BSkyB has always insisted that it is no more than a long-term passive investor in ITV and is not seeking to influence ITV’s policies or operations.

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