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Virgin Media end of year results show 4.9% growth in ARPU
Thursday 17 February 2011 08:48:50 by John Hunt

Virgin Media have released financial results for the last quarter and year ending 31st December 2010 which they report to be their best ever year in terms of revenue growth and cost control. In the cable business, the company saw 76,000 net additions over the year, 17,100 of those in the fourth quarter, up by 3,000 on the previous quarter. Average revenue per user (ARPU) increased to £47.51, a 4.9% increase in the year. Triple play (taking broadband, TV and phone) now accounts for 63% of customers, whilst quad-play (taking a mobile service alongside the traditional three) is at 11.8%.

"A strong financial performance combined with the launch of a number of market leading product developments ensured 2010 was a year of great achievement for Virgin Media. We have driven our consumer division to its highest ever rate of revenue growth, maintained robust cost control and delivered our best ever financial year. The significant strides forward in our Mobile and Business operations contributed to this substantial result.

In the year ahead our new TV service, powered by TiVo, will provide a real step change in home entertainment as customers benefit from the unique power of the Virgin Media network. Together with the rollout of our ultrafast 100Mb broadband, across our growing cable infrastructure, we will further accelerate our lead in next generation services and meet the ever growing demand for greater connectivity. Our relentless focus on the customer, combined with our powerful brand ideals, will ensure we deliver a truly Virgin experience in and out of the home."

Neil Berkett, (CEO) Virgin Media

2010 has brought an increase in footprint of 177,000 homes which can access Virgin's cable network. More customers are opting for faster speeds - 32% of new sign-ups in the last quarter opted for 20meg or higher speeds, more than double the same period in 2009, and over 20% of customers are now on 20meg or faster connections. The drift to higher speeds is helped somewhat by the phase out of slower services. Virgin's slowest offering is 10meg, and many customers obviously find this is as a satisfactory speed. The 50meg product now holds 118,000 customers, up 29% on the third quarter, but still only 3% of the total customer base. The new 100meg product launched last year should help growth in this area as its pricing point reduces the cost of the 50meg product. Non-cable broadband customers, those on the Virgin Media 'National' DSL products, account for 6.9% (275,000) of total broadband users.

Virgin account their broadband growth, particularly in the faster speed services down to an explosion in data consumption by users with an increasing number of devices per household being connected. The growth in high-quality video has also helped this, and Virgin now carry over half a terabit of data per second at the peaks.

In the TV sector of the company, 39% of customers are now able to watch HD content after 91,900 HD customers were added in Q4. This compares favourably with Sky who reach around 35% of customers in HD, although Sky do charge extra for the HD service. Unfortunately, Virgin have no released a drill down in to the number of customers opting for their new TiVO PVR service or numbers viewing 3D content (the latter of which is expected to be low).

Comments

Posted by undecidedadrian over 6 years ago
Pehaps they can stop bombarding me with all the junk mail they send now.

I haven't changed my mind in swapping since the last one you sent me last week.
Posted by herdwick over 6 years ago
half a terabit = 500 Gbits/s divide 4m broadband customers gives 125kbits/s each. Interesting.
Posted by ordinary_boy over 6 years ago
When you go to Virgin media's web site the broadband products on offer are: 10Mb, 30Mb, 50Mb, and 100Mb.
This article refers to '20% of customers are now on 20meg or faster connections.'

Does this mean that there are still a lot of existing customers on a 20Mb product which have not been automatically upgraded to the 30Mb?
Posted by Dixinormous over 6 years ago
ordinary_boy - yes, it requires specific CPE.
Posted by AndrueC over 6 years ago
TiVO is still preorder I think so that's probably why no information is given. We do know that a lot of existing TiVO owners are annoyed though :-/

So 3% of people want the 50Meg service huh? Wow. Clear evidence of demand there then. Just not much of it.

Still - good to see that VM are increasing their reach. Is this just infill of existing areas?
Posted by themanstan over 6 years ago
A quick look at their Q4 2009 and Q4 2010 figures show they have really done anything with their debt £5.9B vs £5.7B.
Posted by themanstan over 6 years ago
apologies, typoe, "haven't done anything"
Posted by Legolash2o over 6 years ago
Good work Virgin Media, keep it up :)
Posted by ProdMan over 6 years ago
@herdwick - 125kbit/s each if everybody was running sessions at precisly the same time. 500Gbit/s is to be expected in peaks and will increase several fold in the coming years for all operators. Bear in mind, that this is with no packet loss, so the logical connection is engineered to handle far higher than that. The data network and peering within VM's network has become very well engineered.
Posted by ProdMan over 6 years ago
@AndrueC - I am on the Tivo Trial with VM (I don't work for VM btw). They are currently aiming at an April launch for the product.

Tivo themselves are withdrawing support for Series 1 boxes, which are all circa 2000 - 2002, which seems reasonable for a consumer product of that age.
Posted by andrew (Favicon staff member) over 6 years ago
50Meg specific content is still fairly rare, so the key figure is those opting for the next teir down, i.e. willing to pay a little more for a premium service.

It shows that the key to getting the 5% or so who need higher speeds, is ensuring a better than average product is available at a reasonable price e.g. the 20/30Meg teir
Posted by AndrueC over 6 years ago
@ProdMan:So you think that 'Lifetime' means ten years?

http://www.reghardware.com/2011/02/15/tivo_to_cull_old_uk_set_tops/

But I'll fess up - I'm not a TiVO user. Never have been. I just think it's cynical that they make that announcement within weeks of announcing a new deal with VM.

Tough luck on the TiVO people outside of VM's area eh?
Posted by otester over 6 years ago
I think it is more down to ignorance and cost, Usenet currently supports up to 1GBps.

So there is content, but how many people are aware of Usenet?
Posted by qjh1 over 6 years ago
Revenues may be up, but service is down. My 10M product seems to run at 2-3M most days, you can't e-mail them any more and their call centres for broadband now appear to be in Mumbai, so you can't get any sense out of them.
Posted by ProdMan over 6 years ago
@AndrueC - I kinda agree on the cynical comment :) That's the business world we live in.

A lifetime cycle for a consumer electronic product of ten years - very reasonable. Product Lifecycle management is industry speak - doesn't literally mean lifetime.

There is no value in making the perfect product
Posted by AndrueC over 6 years ago
@ProdMan:Yeah I understand the ten year thing. Maybe people should always be wary of 'Lifetime' :)

But it's not even as if TiVO are making new kit available. I mean they are..but only for a select few. For the rest it's 'good night, go find another PVR sucker.'
Posted by ProdMan over 6 years ago
@AndrueC - The TiVo box on Virgin is a Cisco device with VM livery on it.
They struggled to gain a major foothold over here, hence the tie up with VM, but it will remain a premium type product/service.
Shame if you are not on the cable footprint, as the user experience is really good.

Not sure how long any exlusivity period is with VM - may only be short.
Posted by krazykizza over 6 years ago
If VM offered services that utilized their 50mbps/100mbps offering I think they'd be more popular. Perhaps trialing 1080i via the iPlayer on the Vbox to mirror the quality that BBC One HD gives out. Things like that
Posted by john (Favicon staff member) over 6 years ago
@otester not quite sure what you are getting at about usenet supporting 1GBps there?
Posted by krazykizza over 6 years ago
@john Think hes on about quantity, rather than quality.
Posted by New_Londoner over 6 years ago
When you look at new customer numbers, they seem to be losing considerable ground to Sky and BT. Also, the expansion of the footprint of 177k in the quarter is less than what BT are adding to FTTC every two weeks, based on previous TBB numbers.
Posted by otester over 6 years ago
@john

What I mean is that there are services available to take advantage of higher speed connections when it comes to getting content.

@krazykizza

What do you mean by that?
Posted by yellowhat over 6 years ago
Just got thirty meg with the new box. Brilliant, combines box and wireless router and I've just tested out at 30.02 meg.
Now for some more memory.
Posted by wirelesspacman over 6 years ago
Just a little snippit for comparison...

We have around 400 customers on our FWA network. Traffic is currently peaking at around 40Mbps, equating to around 100kbps per customer. All our customers are on Gigabyte per month tariffs (it is the only way a small ISP can survive is my view and always has been since our early days).

Just goes to show that the VM customers (and I am one at home) are not so heavy users "on average".
Posted by otester over 6 years ago
@wirelesspacman

What would that be without STM though...
Posted by songster over 6 years ago
If they stopped overselling their network and concentrated on actually providing the service we pay for, it would be great! As it stands I have 30% packet loss and ~1000ms pings for gaming from 7pm to midnight on weekdays, and 9am to midnight on weekends.

If you're in Cambridge, do not trust Virgin broadband.
Posted by mcardwell over 6 years ago
I'm on 10Mbps with VM. In the morning fine only drops to 9Mbps after midday it starts slowly to drop, In the evening i could be down as low as 2Mbps Are people on higher connecting speeds taking connection speed away from me. Thereby making me pay for higher connection speed (I'm a fibre-optic cable customer) In Blackpool. ANY Comments
Posted by mcardwell over 6 years ago
Also I am on the short list for the TiVo box will know in March if i am lucky to have it for 12 months free
Posted by wirelesspacman over 6 years ago
@ otester

STM?
Posted by otester over 6 years ago
@mcardwell

It would be spread evenly so chances are you're not the only one.

Upgrading to 50Mb/100Mb would solve the problem though as it's on DOCSIS 3 network not DOCSIS 2 (10Mb/20Mb/30Mb).

@wirelesspacman

Traffic management or the threat of it...
Posted by mcardwell over 6 years ago
@wirelesspacman
Thanks for that reply
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