LONDON -(Dow Jones)- Takeover target British Sky Broadcasting Group PLC (BSY.LN) Thursday reported a better-than-expected 40% jump in second quarter net profit as it increased its customer base, and said it has boosted its mobile content with the acquisition of Wi-Fi operator The Cloud.

BSkyB, the U.K.'s largest pay-television operator which is at the center of a controversial GBP7.8 billion takeover by its biggest shareholder News Corp. (NWS), booked a net profit of GBP179 million for the three months ended Dec. 31, up from GBP128 million a year ago. The performance was driven by the sale of 1.2 million products and new customer additions.

The company added 140,000 net new customers in the quarter, taking its total customer base to around 10.1 million, which helped second quarter revenue rise 15% to GBP1.66 billion from GBP1.44 billion a year earlier.

BSkyB's strong performance led analysts to call for News Corp., which already owns a 39.1% stake in the company, to increase its 700 pence a share proposed offer to buy the 60.9% stake in BSkyB it doesn't already own.

Royal Bank of Scotland analyst Paul Gooden said he now expects News Corp. to complete the deal, which has raised competition concerns, at 850 pence a share

The U.K. government Tuesday delayed referring the deal to the Competition Commission and gave News Corp. the chance to submit proposals on how it could solve any competition concerns. Gooden said the decision was good news for News Corp. and he expects the deal to complete in the second quarter.

News Corp. also owns Dow Jones & Co, publisher of this newswire and The Wall Street Journal.

At 0944 GMT, BSkyB shares were up 12 pence, or 1.6%, at 770 pence in a flat London market.

BSkyB, which competes against U.K.-based cable-television and Internet provider Virgin Media Inc. (VMED)and telecommunications firm BT Group PLC (BT.A.LN), said the acquisition of Wi-Fi provider The Cloud Networks Ltd. gives it ownership of more than 5,000 public Wi-Fi locations across the U.K., ensuring that customers can access its online service at a network of locations.

The deal will also complement its existing broadband services by offering customers an option for Wi-Fi connectivity.

BSkyB paid less than GBP50 million for The Cloud, which had gross assets of GBP17.1 million at the end of 2009, Chief Financial Officer Andrew Griffith said.

Chief Executive Jeremy Darroch said the company is open to further bolt-on acquisitions to support growth and sees "significant potential for long-term growth in the entertainment and communications marketplace.

"We expect that our growth will benefit from being more broadly based in the future, through the combination of continued take-up of pay TV, increasing penetration of premium TV products, growth in our share of home communications and in our other revenue lines," said Darroch.

BSkyB declared an interim dividend of 8.74 pence, up 11% from a year earlier.

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