Virgin Media Q1 results pave way for growth

Cable operator Virgin Media has posted an optimistic set of first quarter results, adding a net 204,900 new customers for its services. It says better customer retention and stablising revenue per customer left it positioned “for growth”.

It says operating income before depreciation and other charges was £324.2m in the three months to the end of March on revenue of £1bn. Its operating loss fell to £4.6m from £17.8m in the last quarter of 2007 and £15.3m in the same period last year.

Virgin Media also says it has achieved “record” triple-play penetration – where customers take three of its four services – of 51.3%, up from 42.9% a year earlier.

Chief executive Neil Berkett says today (May 8) in a statement: “Our first-quarter results represent another solid operational performance. In particular, churn continued to decline, reflecting the emphasis that we have placed on this area.”

“Our results demonstrate that our customers are continuing to respond positively to our compelling consumer propositions. We remain focused on leading in next-generation broadband and redefining the TV experience through on-demand.”

Virgin Media says it had 36,800 net new additions to its television service, 88,400 net new additions to its broadband offering and added 29,000 customers to the telephony service. These additions were mostly existing customers buying extra services. Churn, or the percentage of people dropping their subscription, was 1.2% a month.

Adds Berkett: “With our focus on customer value, reducing churn and stabilising ARPU [average revenue per user], we are well positioned for growth.”

The cable giant, formed from the mergers of NTL, Telewest and Virgin Mobile, says its strategic priorities are to “lead the next generation broadband market in speed and quality and to redefine the mid-market TV experience through on-demand”.

Last month it added the BBC iPlayer on-demand catch-up service to its platform. Later this year it will rise subscription prices across its services in an attempt to further stabilise ARPU.

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