Virgin Media reveals fastest growth yet in numbers of cable customers

Published on Wednesday 28 April 2010 20:53

VIRGIN Media is adding cable customers at the fastest pace since being created from the merger of NTL and Telewest four years ago.

The telecoms and cable heavyweight yesterday reported a better-than-expected net gain of 38,300 cable customers in the first three months of the year, up markedly on the 7,100 seen a year earlier.

Virgin Media, which competes with pay-TV company BSkyB and broadband providers such as BT Group, also saw the number of mobile phone contract customers rise past the one million mark for the first time, as it switched focus away from the pre-pay market.

The group, which is 4 per cent owned by Virgin empire tycoon Sir Richard Branson, posted a 14.1 per cent rise in underlying operating income during the first quarter, to 356 million.

Chief executive Neil Berkett said: "We've got a rhythm about us now. To produce results showing strong customer growth, as well as strong financial performance, is very pleasing."

The firm's cable broadband offering continued to attract new subscribers, up 53 per cent year-on-year at 72,300 on a net basis in the fourth quarter, helping to take total broadband customers to 4.2m.

Disconnections fell to the lowest level in the merged group's history, with the churn rate – the percentage of customers joining and leaving the group – at 1.1 per cent, maintained at the record low recorded a year earlier.

Virgin announced in February it was to lead the way in super-fast broadband in Britain, with plans to roll-out the UK's first 100Mb service by the end of 2011.

It already offers speeds of 20Mb to 50Mb nationwide, with the number of subscribers taking 50Mb up 40 per cent in the quarter.

Telecoms analyst Steve Malcolm, at Evolution Securities, said the figures were "proof that after 26 years, it is finally leveraging cable's hitherto theoretical network advantage".

A focus on improving customer service has also helped the group to hold on to more customers, with Virgin Media claiming to have brought faults down to a record low following major investment.

The group has likewise been seeking to get customers using more than one service, with 62 per cent taking three and 11 per cent taking four. Overall revenues rose 2.9 per cent in the three months to 963m, led by the cable customer growth.

Virgin Media was formed in March 2006 through the merger of the UK's then two largest cable companies, NTL and Telewest, and the subsequent takeover of Virgin Mobile.

The company joined the London Stock Exchange in January to add to its New York listing. Shares have risen more than 130 per cent in the past year.