Virgin Media loss widens as marketing costs jump

28 Feb 2007

Virgin Media, the UK largest cable operator formed by the merger of ntl and Telewest, has said its 2006 loss widened as costs more than doubled after the company increased marketing. The net loss for the year was GBP533.9 million pounds (USD1.05 billion), compared to a profit of GBP421 million a year earlier. Costs rose to GBP3.59 billion from GBP1.97 billion, while revenue grew from GBP1.95 billion to GBP3.6 billion. At the end of the year the company claimed 4.11 million cable telephony customers, 3.35 million cable TV subscriptions and 3.06 million cable broadband connections, taking its ‘on-net’ revenue generating units (RGUs) to 10.52 million.

Overshadowing its results announcement is Virgin Media’s ongoing and very public spat with satellite TV rival BSkyB over distribution fees for four of BSkyB’s channels. Virgin’s current contract to air Sky One, Sky Two, Sky Sports News and Sky News expires at midnight tonight and BSkyB said on Monday that it was possible they might not reach a distribution deal. Virgin responded by saying that BSkyB was seeking to double the cost of the existing distribution contract for the four channels, whose average audience size has fallen on average by 7% a year over the past three years.

United Kingdom, Virgin Media