The results were "slightly disappointing" and the higher-than-expected churn rate "may cause some concern, " said UBS analyst Daniel Kerven last week.

BSkyB chief executive James Murdoch maintained that the business is "performing well" and said that operational achievements in the quarter were "outstanding". Sales rose 11% to £1.06bn.

"We achieved our goals, continued to grow our customer base and increased the number of products they choose to take from us, " said Murdoch.

Profit was expected to reach £159m on revenue of £1.12bn, the median estimates of seven analysts surveyed by Bloomberg News. New subscribers were expected to be at 48,600 and the churn rate at 11.1%, the survey showed.

The company said that its churn rate had risen to 11.4% in the quarter compared to 10.6% in the second and 11.7% in the first quarter. However, it added 40,000 new directto-home (DTH) customers in the third quarter, but that was less than half the 95,000 it added in the same quarter last year.

Sky now has over 400,000 DTH subscribers in Ireland, representing an increase of 52,000 since March last year.

Its Sky+ subscriber base in Ireland and the UK grew in the period, adding 149,000 households in the third quarter to bring its total to 1.43m.

Sky said that despite an estimated decline in the UK television advertising sector of 0.6%, advertising revenue at the broadcaster increased 6% to £257m in the period.

The company added that it now has a 12.9% share of the UK television advertising market.

Meanwhile, Sky Bet revenues increased 17% on the comparable period to £27m.

That comprised a 28% increase in gross Sky Bet revenues to £239m, driven by growth in Sky Vegas revenues and a 30% increase in betting payouts to £212m.

Average revenue per user was £392 in the third quarter, a £10 increase on the same quarter a year earlier and £5 lower than the second quarter.

Merrill Lynch analysts had said that BSkyB's results would be "overshadowed" by the ongoing bidding for Premiership football rights.

"The renewal of the Premiership rights represents a major risk for the stock" said Merrill Lynch analysts on Wednesday.

Most Sky subscribers sign up to watch the matches during the year and loss of any premium packages would spell trouble for the broadcaster.

BSkyB has used a 14-year monopoly on live elite league broadcasts to help attract 8m subscribers. Its previous purchase of 138 live games for three seasons until next year prompted the European Commission to order the league to split the current sale into six packages and award no more than five to any one company.

On Friday, Sky said that it had won four of the six packages of rights to broadcast live Premiership matches, one less package than expected by analysts.

Irish broadcaster Setanta, which also has the rights to broadcast Scottish Premier League matches, won rights to two packages at a cost of £392m. Whether it can generate profit from the 46 games remains the big question.

Sky paid over £1.3bn for its four packages, which last for three years from 2007. It had paid £1.02bn for its current three-year monopoly rights to all matches. That deal expires at the end of the next season.

The shares rose 10p in London to £5.28 on Friday evening.

BSkyB won three 23-game packages in an initial round of bidding last month. The rights won on Friday by BSkyB included the soughtafter package for games played Sunday at 4 pm, which often feature the mostwatched matches.

Sky will also begin broadcasting matches, as well as movies and other services, in high definition in just over two-weeks' time. That could be a decent draw for the company's services.

There has been "encouraging customer demand" since bookings opened in mid-April, said Sky last week.

The broadcaster's broadband internet service will begin this summer, following last year's purchase of Easynet.

"The key swing factor for BSkyB remains Easynet, " Numis Securities analyst Lorna Tilbian said in a note.

Numis expects BSkyB to offer free broadband to its premium customers, and has not yet said what Easynet costs will be for 2007.