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A letter to Rugby Channel subscribers pitches it as a saving (the Rugby Channel costs $8.81 per month, and is only available to those who already have a sub to the $31.99/month Sky Sport).
It says Rugby Channel content - which includes documentaries, replays and European rugby - will be "moved to our regular Sky Sport channels."
The letter promises that "From August 1, we have a hugely expanded Sky Sports channel lineup launching [including] a 24/7 rugby channel."
A spokeswoman for Sky says the 24/7 rugby channel will be at no extra charge.
There are no details of the expanded channel line-up yet, but Sky's new director of sport Tex Teixeira offers: "We are focused on improving our offer for our loyal and valued customers. Removing the Rugby Channel fee and making the channel's content available to all Sky Sport customers follows a move to show all our secondary school rugby on regular Sky Sport channels earlier this year.
"We want to show our customers that we're committed to doing the right thing by them. This change is the first of a number of changes coming to Sky Sport in August, and we look forward to sharing more on those soon."
Last month, new Sky TV boss Martin Stewart told the New Zealand Herald that the broadcaster needed to lift its game in sport and fight harder for rights, rebuild relationships with sports bodies and make more of its content available through its Fanpass streaming service as it faced new competition from Spark Sport.
There was no immediate update on Fanpass today, but analysts will be watching closely to see how Fanpass fares in the August shakeup - which will serve as a marker about how serious Stewart is in following through on his comments that Sky TV needs to invest more in streamed content.
Pundits say Stewart has his head screwed on and praise his broad strategy. But so far, details of how it will play out have been scarce.