Virgin’s picture similar to that of rival

Published on Sunday 5 February 2012 00:00

VIRGIN Media is expected to reveal that its customer base stabilised towards the end of last year, confirming that the big players in the highly-competitive television, broadband and telephone market are entrenching their positions.

The company, which will reveal its fourth-quarter and full-year results on Wednesday, is expected to have added few new users to its cable TV network, but should make up for that by selling more products to existing customers.

Rival BSkyB reported a similar trend last week, saying that hard-pressed customers were keen to take advantage of the value offered by all-inclusive packages for TV, internet and telephony. It also announced new services, including a “superfast” broadband offering that takes it into competition with one of Virgin’s best-selling lines.

Peel Hunt analyst Patrick Yau said Sky’s offering is “priced keenly” and could put further pressure on Virgin costs. Carriage fees on new channels announced last week will also add to Virgin’s wholesale costs for carrying Sky content.

He added: “One area the company has only recently been pushing is its business product, as it is using its fibre network during the day to provide service to the business segment of the market.”

Yau expects Virgin to announce revenues of just under £4 billion for 2011, a slight rise on the year before. He said operating cash flow is the company’s key metric, which he forecasts at £1.56bn, up from £1.51bn a year ago.