Virgin Media postpones UK price rises
November 5, 2020
Virgin Media says it is successfully navigating through the Covid-19 pandemic and is investing in digital and in innovation. The UK and Ireland cable operator is delivering broadband, video and fixed-line telephony services to 6 million customers, and mobile services to 3.5 million subscribers at September 30th 2020.
Virgin Media says it expects to emerge from the pandemic as “a stronger, more agile business and remain focused on delivering mid-to-long term growth in operating free cash flow (OFCF) and FCF.” The company added it has continued investing in high speed connectivity and entertainment products, accelerated its digital transformation and improved the resilience of customer operations. In addition, Virgin Media says it has postponed UK price rises to support its customers through the pandemic.
In Entertainment, Virgin Media started the deployment of its most advanced connected entertainment platform, Virgin TV 360, beginning with Ireland in October. The service is expected to be launched in the UK market during Q4
In Connectivity, a continued focus on improving NPS resulted in a YoY reduction in churn which contributed to Virgin Media’s best customer gain since Q3 2017. Fixed-line customers surpassed 6 million in the quarter, with an acceleration in quarterly growth to 37,000 net adds in Q3 versus a 3,000 net loss in Q3 2019.
Virgin Media delivered 15,000 net adds in its BAU footprint, a second consecutive quarter of growth. This performance was underpinned by 48,000 broadband adds in Q3, up from 5,000 in Q3 2019. There was also an increase of 22,000 customer relationships in Virgin Media’s Lightning footprint, in-line with the Q2 performance.
Cable subscription revenue decreased 0.6 per cent on a reported basis and 0.7 per cent on a rebased basis. The increase in fixed-line customers was offset by Covid-related impacts to Q3 ARPU from lower premium and PPV video revenue and the effect of postponing the aforementioned UK price rise.
Virgin Media saw revenue of £1,291.4 million in Q3 increased 0.8 per cent on a reported basis and 0.7 per cent on a rebased basis with increases in B2B and mobile partially offset by a Covid-related decline in advertising revenue at Virgin Media’s broadcast business in Ireland. Q3 residential cable revenue was almost flat, it decreased 0.2 per cent YoY on both a reported and a rebased basis.
Virgin Media reported Q3 net earnings of £190.4 million, compared with a £49.1 million net loss in the comparative prior year period. This was largely driven by the net effect of (i) a change in realised and unrealised gains (losses) on derivative instruments, net, (ii) a change in foreign currency transactions gains (losses), net, (iii) a change in income tax benefit (expense) and (iv) a reduction in Segment Adjusted EBITDA.