Customer growth returns for Virgin Media in 3Q11

28 Oct 2011

British cableco Virgin Media saw customer growth return in the three months ended 30 September 2011, reversing a decline reported in the previous quarter. In 3Q 2011 Virgin Media reported net cable customer additions of 6,300 compared the loss of 36,000 customers it saw in 2Q 2011, although this was still lower than the 14,100 net adds it reported in the third quarter of 2010. Alongside the return to subscriber growth, the cableco also pointed to an improvement in the ‘value and mix’ of its customer base, noting that its focus on consumers with a ‘greater lifetime value’ had helped boost the proportion of its customers on the higher tiers of the services it offers. The number of Virgin Media customers signed up to three of its services had increased by 2% in the year to end-September 2011, while the operator also highlighted the fact that 54% of new subscribers in 3Q11 had signed up for broadband services offering downlink speeds of 30Mbps or more; it claimed this was the highest ever number, as well as proportion, of customers taking superfast connections. With the operator reporting a total of 4.072 million cable broadband accesses at 30 September 2011 (up from 3.969 million a year earlier), it said that more than a million of those were now signed up for tariffs offering speeds of 20Mbps or higher, with more than 500,000 of those taking 30Mbps connections or higher.

Financially, in the company’s third fiscal quarter of 2011 it reported a total turnover of GBP1 billion (USD1.6 billion), up from GBP978.4 million in 3Q10, while operating income rose by 26.3 year-on-year to GBP128.4 million. The company, however, posted net loss of GBP73.8 million compared with a GBP41.8 million profit in the corresponding period a year earlier.

Commenting on the results Virgin Media CEO Neil Berkett said: ‘Our results show that we’re successfully serving what is a rapidly emerging market for better quality services. The demand for superior connectivity is accelerating as more people, regardless of their circumstances, recognise the best digital technology is worth paying more for … We are increasing the value and mix of our customer base as people add or move to higher tier services and as new joiners increasingly take up higher value products. This, along with subscriber growth, has increased revenue and we have had further substantial increases in free cash flow and OCF. ‘

United Kingdom, Virgin Media