BT is continuing to bet big on sport, paying nearly £300 million a year for exclusive live television rights to the UEFA Champions League and Europa League football matches for three years from 2015. It is seen as a coup for BT Sport and a blow to the dominance of Sky in its football coverage in the United Kingdom. Yet the incumbent telco is paying a high price to maintain its market share, rather than promoting improved broadband services.

It is the first time that a single organisation in the United Kingdom has acquired the exclusive live rights to all matches from both European tournaments. The aim is to boost football coverage on the BT Sport channels. The company says it will show a selection of matches free on BT Sport, even to homes that have not signed up to the channels.

Gavin Patterson, the chief executive of BT, said: “The live rights will give a major boost to BT Sport and give people yet another reason to take our terrific service.” He spoke of “giving sport back to the fans” and making European football “far more accessible and affordable with BT.”

The rights are currently shared by Sky and ITV. BT is investing more than twice what those companies are currently paying for the coverage rights.

“We bid with a clear view of what the rights are worth to us. It seems BT chose to pay far in excess of our valuation,” said a Sky statement. “If we thought it was worth more, we’d have paid more.”

BT is already paying £738m over three years for the rights to 38 live Premier League matches a season, while Sky is paying £2.3bn for 116 matches a season over the same period.

It means that BT is paying over half a billion pounds a year for football rights alone, excluding the cost of coverage and setting up a new broadcast centre. That is about the combined programme budget of BBC Two, BBC Three and BBC Four, or more than is spent on all BBC network and local radio programmes.

It works out at £78 for each of the 7 million BT broadband subscribers. Between them, they generate around £1.1 billion in broadband and television revenue for BT, which works out at an average annual revenue per user of £165. So nearly half of the total revenue for BT broadband and television services is being spent on football rights.

It works out at even worse value for the 900,000 BT TV customers, at over £600 per household spent on football rights alone. That is more than the total £559 average revenue per customer for Sky, across television broadband and telephony services combined.

BT is increasing its monthly broadband charges by 6.5% from January 2014.

While football coverage is often seen as key part of pay-television programming, it still attracts relatively small numbers of viewers, with an average audience of around 1.5 million viewers a match in the United Kingdom, although that does not include those watching in pubs and clubs.

In the last week of October, BT Sport reached around 3 million viewers, or just over 600,000 a day, which is just over 1% of the total television audience, according to the audience research organization BARB.

The highest rating for BT Sport 1 was 611,000 viewers for a Barclays Premier League match late on a Saturday evening, while a UEFA Europa League match on a Thursday evening scored only 45,000 viewers, insofar as sampling error allows any confidence in estimates.

Even if BT makes available some of the games for free, it is difficult to see how the loss of some matches from the free-to-air commercial channel ITV will benefit viewers.

The aim for BT is to reduce defections of customers to Sky and attract subscribers to BT Sport, which is currently available bundled with premium BT broadband packages.

In its quarterly results, BT spent an extraordinary amount of time talking about football, announcing proudly that more than two million of its customers have signed up to the BT Sport channel. The majority of these were already BT broadband subscribers.

So far BT is measuring its success in reducing line losses a modest increase in broadband subscribers, although pre-tax profits were down 13% to £948 million over six months, partly as a result of the investment in sport.

BT is now committed to spending around two billion pounds to provide coverage of football matches that could previously be seen elsewhere.

Yet the strategy is strangely reliant upon its competitors. BT is dependent on distributing its own BT Sports channel on the Sky and Virgin Media platforms to achieve reach.

Meanwhile BT has been dragging its feet on investment in rural broadband, contributing only £356 million to projects, despite accepting subsidies of £1.2 billion of public money, according to a report by the Public Accounts Committee.

In large areas of the country there are still many homes that can only receive broadband at less than two megabits per second.

Some might wonder whether the telecommunications company might be better advised to invest in broadband infrastructure and its core business rather than attempting to compete as a pay-television provider.