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Virgin Media adds 30,000 cable broadband customers in last quarter
Wednesday 08 February 2012 09:47:28 by Andrew Ferguson

Virgin Media has issued its Q4 financial results for the period ending 31st December 2011, and they show another communications provider who is growing in some areas, but showing decreases in other areas.

Our strategy of focusing on customers who want more from the digital world is paying off. With the number 1 of TiVo customers doubling in the final quarter of the year, our new TiVo service is attracting both new and existing customers. Since its commercial launch mid-way through the year, the number of TiVo subscribers has grown to almost half a million with a large and growing proportion now using its next generation functionality on a regular basis. Demand for better broadband also continues to grow fast, with around half of new customers choosing superfast speeds. The combination of the best TV experience and the best broadband, has enabled us to acquire more new customers in the quarter. Our confidence in the growing mainstream demand for next generation digital services has recently led us to announce the roll-out of an ambitious programme to double the broadband speeds of over four million customers. This marks a step change in the migration to superfast speeds and, combined with the continued evolution of TiVo, further differentiates the Virgin Media customer experience.

Neil Berkett, Chief Executive Officer of Virgin Media

Broadband is very much a growth area for Virgin Media, adding some 30,000 net customers to its cable broadband service in the last quarter, up 91,800 over the last twelve months, taking the total to 4,850,600. The number of off-net customers continues to decrease with 12,500 leaving in the quarter, meaning they have 248,200 running on BT Wholesale ADSL or C&W LLU ADSL2+ services.

The other elements of the quad-play that Virgin Media offer showed the following net changes, cable TV added 1,100 customers, telephone lost 8,300 from cable, and 6,400 from their WLR product. Mobile phone contracts showed the greatest growth adding 102,500 in the last quarter.

With Virgin Media currently offering 10 Mbps through to 100 Mbps speeds, and an 18 month speed uplift and network investment programme underway, the split of customers across their product range gives some indication of the demand that may or may not exist for superfast broadband when people have to actually vote with their wallet. Over the course of the year some 579,000 customers have been added to the 30 Mbps or faster speed tiers, with 133,000 in the last quarter. 28% (1,200,000) of customers subscribe to a 20 Mbps or faster product, 700,000 connect with 30 Mbps or faster, and there are some 200,000 customers on the 50 Mbps and 100 Mbps products.

This means that some 14.4% are on a product classed as superfast broadband (using BDUK definition of 25 Mbps or faster), which means that any local authority BDUK plan needs to ensure that entry level speed/price options are available if they want to ensure a high uptake of the services. As part of the drive for digital inclusion offering social tariffs that are affordable for people who only need a connection for interacting with gov.uk services and banking will be important. The increase in speed of the 20 Mbps tier to 60 Mbps will put at least 28% of the Virgin Media customer base on a 60 Mbps or faster service.

Comments

Posted by themanstan over 2 years ago
Well done to VM for finally turning an annual profit! A year or two earlier than I thought. Still, a pity they'll sit in their hands on expanding their network significantly.
Posted by GMAN99 over 2 years ago
Yes congrats! Its chicken and egg though really, its expensive to expand but then it could pay off by getting even more new customers.

Not sure why Branson doesn't bung a load at it so they can expand further.
Posted by Northwind over 2 years ago
Mr Branson is unlikely to bung any money into the network because he has nothing to do with "Virgin Media"; NTL-Telewest just license the name from Virgin Enterprises for an annual royalty.

If customer satisfaction drops low enough to besmirch the Virgin "brand image" then he'll revoke the license. Until then...
Posted by herdwick over 2 years ago
So user-chosen and paid for 50 / 100M is now 4.1% of their cable user-base.
Posted by otester over 2 years ago
@themanstan

Over expansion nearly destroyed the cable network all together, maybe look up how much debt VM still has left, BT is in a similar position, albeit slightly better.
Posted by undecidedadrian over 2 years ago
Over expansion wasn't the problem, the banks forced NTL and Telewest in a huge spiral of buyouts of all the smaller players and then forced a merger to compete with Sky.

Oh wait those are the same banks that almost went belly up a couple of years later.

Trouble is nobody wants to enter the cable TV market now as all the competiton was wrung out of it.
Posted by themanstan over 2 years ago
@otester

Indeed, in fact the expansion did destroy the companies ability to function. Both went bankrupt, the debtors ended up owning the companies and the original shareholders got very little or nothing at all.

I can see why they won't for two reasons, not wanting to step over the SMP mark and lack of capital... or more realistacally not wanting to take on more debt.
Posted by GMAN99 over 2 years ago
Really Northwind? I had no idea.. very interesting
Posted by otester over 2 years ago
@undecidedadrian

Wouldn't they have had to have been taken over by the banks before they could be forced?
Posted by rided over 2 years ago
As a Virgin Media pensioner, I would love to be a user of their TV/Broadband/Telephone service but, although their fibre optic system runs within 15 metres of my house, VM say that they cannot connect me and cannot give me a good reason why this is so. Oh well, I hope that my pension is more secure!!!
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