Virgin Media, while not expanding the coverage of its cable network, is still managing to sign-up customers with 88,400 additions to its cable broadband packages and some 36,800 TV connections added in the quarter ending 31st March 2008.
"Our first quarter results represent another solid operational performance. In particular, churn continued to decline, reflecting the emphasis that we have placed on this area. Our results demonstrate that our customers are continuing to respond positively to our compelling consumer propositions. We remain focused on leading in next generation broadband and redefining the TV experience through on-demand. With our focus on customer value, reducing churn and stabilizing ARPU, we are well positioned for growth."Neil Berkett, Chief Executive Officer of Virgin Media
The news is not all brilliant as the Virgin Media ADSL service lost some 7,800 subscribers and looking at the comments from customers, appears to suffer from a lack of investment.
For Virgin Media the future is firmly pinned on the hope that its 50Mbps cable broadband package will appeal to sufficient numbers of customers to make the investment worthwhile. Virgin Media, when it was NTL and Telewest, was always competing with BT Retail who were generally fairly easy to beat on price. The rise of high-speed ADSL2+ at a price point that undercuts the faster Virgin Media packages presents a real challenge. 50Mbps broadband will appeal, but will the price premium above the current 20Mbps product appeal to more than 5 or 10% of customers. Currently something like 25% of cable customers opt for the 20Mbps service at £37 a month.
Further competition with fledgling fibre to the home services offering 100Mbps connections on the way. So how the big two in the form of BT Retail and Virgin Media respond as 2008 develops will be interesting.