Virgin Media reports strong 3Q10 as it opens pre-registration for 100Mbps service

27 Oct 2010

UK cableco Virgin Media has released its financial results for the three months ended 30 September 2010, and while the operator fell short of customer acquisition expectations for the quarter, it managed to increase turnover by 6.4% year-on-year. For the three-month period Virgin posted total revenues of GBP978.4 million (USD1.55 billion), up from GBP919.4 million in the corresponding quarter in 2009, with turnover from all three of its sectors – cable, mobile and non-cable – increasing year-on-year. The company also reported that operating cash flow (OCF) was GBP383.3 million in 3Q10, up from GBP349 million a year earlier, while operating income stood at GBP101.7 million, almost double the GBP51.1 million twelve months previously.

While Virgin had been expected to add around 21,000 customers over the period by Reuters estimates, the operator saw its on-net subscriber base rise by 14,100. Further, despite ‘significantly increased marketing activity’ from its rivals, Virgin said that it had opted not to aggressively increase its own advertising costs, noting that as a result churn had increased to 1.6%. However, the number of customers signed up to the cableco’s triple-play bundles has continued to climb, helping to boost turnover, with 2.996 million subscribers, or 62.7%, taking three services, up from 2.82 million (60.1%) a year earlier.

Virgin’s high speed broadband customer numbers rose to 4.24 million at end-September 2010, up from 4.03 million a year earlier, of which the bulk (3.97 million) were on-net. Of those more than 700,000 had signed up to the operator’s 20Mbps or 50Mbps services, up 41% y-o-y. Higher speed services are now set to be introduced in the next few months, with Virgin also announcing that pre-registration for its 100Mbps service is now open, and it expects to introduce the new higher speeds in parts of London, the south east and Yorkshire from early December 2010.

Commenting on the results, Neil Berkett, Virgin Media’s CEO, said: ‘Our continued focus on exploiting our strategic advantages with the resulting multiple opportunities for revenue growth, as well as robust financial discipline has delivered another strong financial performance this quarter. We are extending our lead in broadband even further with the imminent availability of 100Mbps as consumer demand for consistently faster broadband grows.’

United Kingdom, Virgin Media