Virgin: Revenue up but new subs stumble

Virgin Media grew its turnover 5.7 per cent to £982 million (€1.13bn) in the first quarter and ARPU was up 2.6 per cent YonY to £46.16 (though this was down on Q4 2010). However the company added only 20,200 new subscribers, 47 per cent down on Q1 of 2010, and the TV service added just 10,100 customers a 70 per cent drop YonY. Of the TV subs more than 1.5 million have high definition – the company added 66,400 new HD customers in the fourth quarter.

The total subscriber base is 4.82 million. Triple play customers grew slightly to 63.4 per cent of the subscriber base, quad play customers grew to 12 per cent of the total. Virgin signed 50,100 new customers to its broadband in the first quarter – again down on the 72,300 in the same period last year – with 39 per cent of new customers taking 20Mb or higher speeds. A year ago just 15 per cent signed up for high speed packages.

The company said that there has been “strong early interest” in its next generation home entertainment service powered by TiVo. A total of 65,000 customers have pre-registered for the new TV service.

Chief Financial Officer, Eamonn O’Hare, said: “You could look at the 10,000 figure and say ‘that’s not good’, it is rather anaemic, but you need to look under the covers and it is the quality of customer that is the focus. When you look at the uptake of HD, video-on-demand and high speed broadband services, the quality of customer is ever increasing.”

Virgin Media said there had been 22 per cent year-on-year growth in the first quarter of the number of customers taking its Sky premium suite of channels, taking the total to about 800,000. O’Hare added that Virgin was no closer to securing a deal to air Sky Atlantic on its service.

“This has been another solid quarter where we have maintained strong levels of revenue growth and generated substantial free cash flow,” said Neil Berkett, chief executive of Virgin Media.

In Virgin’s mobile phone division, contract customers rose by 52,600 to 1.26 million with revenues up to 3.8 per cent to £136.9 million in the quarter

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