Morningstar noted Sky TV boss John Fellet had been at the company "for more than two decades".

Sky Television can expect to lose about 12,000 satellite television customers each year for the next five years, Australian analyst Morningstar has forecast.

The broker predicted in a research report that the pay TV company would see its traditional customer base decline by 2 per cent a year until 2022.

Morningstar forecast revenue losses could to some extent be offset by growth in Sky's internet television services Neon and FanPass, but said its profit margins would fall.

Subscriber losses of the order forecast by Morningstar would represent a significant improvement on the haemorrhage of almost 34,000 satellite subscribers in the year to June.

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* Sky TV slashes Fan Pass sports service

Sky chief executive John Fellet said then that "now was not the time for a massive conversion of its core business" to a video-on-demand model.

Sky surprised some onlookers by removing weekly and monthly options to its online FanPass sports service in May.

But Morningstar said it was imperative that Sky played in the internet space given the challenges to its traditional business.

"Only by keeping a firm hold of its subscribers can Sky maintain its intrinsic value and perhaps appeal to a potential acquirer, whether it be a telecom player or a consolidator."

It speculated Australian pay-TV company Foxtel could be interested in acquiring Sky TV if Foxtel listed on the Australian stock exchange later this year.

Competitive pressure on Sky TV is expected to increase as United States retail giant Amazon edges closer to entering the New Zealand market.

Speculation was intensifying of Amazon's interest in New Zealand rugby broadcasting rights, Morningstar said.

"The five-year rugby rights to Sky expire in 2021 and the process for the rights from 2022 will begin in April 2018 – an early start we believe has been designed to provide Amazon plenty of lead-time to prepare the infrastructure if it wins."

Morningstar attributed a fair value on the ASX of A$2.70 for Sky shares, which is slightly above its closing price on Friday of A$2.61.