Satellite broadcaster British Sky Broadcasting Group (BSkyB) has announced a nine per cent fall in annual pre-tax profits.
The company, which is owned by Rupert Murdoch's Newscorp, said the reduced profits were because of its policy of "building the foundations of future growth" through the launch of its broadband and telephone service.
BSkyB's profits fell from £798 million last year to £0.7 billion. Operating expenses for the year also grew by 14.21 per cent to £3.7 billion.
An increase in the firm's revenues by 9.71 per cent was not enough to offset the increase in expenses.
BSkyB's broadband division also suffered a net operating loss of £169 million.
Chief executive James Murdoch said: "This year has been one of enormous importance and change for us, with the launch of our broadband and talk services transforming our business and our future prospects fundamentally. This expanded product range is now attracting new customers to Sky at a very healthy pace."
He added that the company was in a good position to "capitalise on the significant opportunities available to us".
The company has announced a final divided of 15.5 pence per share.