Virgin Media third quarter results published
Virgin Media has today published its third quarter results which can read in full over at their press office.
The broadband highlights were that Virgin Media has 3,625,700 cable broadband customers, and 260,100 on its off-net ADSL service. They gained 68,700 cable customers and lost 12,600 ADSL customers in the quarter and over the last 12 months the cable broadband service added 318,000 customer, but the ADSL service lost 22,200 customers.
The decrease in the number of ADSL (off-net) users is probably due to the increased competition in the areas where Virgin Media does not have its own cable network from suppliers like TalkTalk, Sky and O2. The cable broadband network seems to be holding its ground, helped greatly by the free upgrade from 4Mbps to 10Mbps, the roll-out of which is now complete.
The big change to try and make itself king of the consumer broadband market is the launch of the 50Mbps cable broadband product in the next quarter. To roll-out the 50Mbps requires investment from Virgin Media and with something like 71% of customers opting for their 2Mbps (M) cheapest product it may prove hard to get people to sign up to a premium priced product, even if it is many times faster than their current service. The financial results reveal that 19% of customers are on the 10Mbps product, and 10% on the 20Mbps product.
If Virgin Media can launch the 50Mbps product for just a pound or two more than the current XL (20Mbps) product and not have the current traffic management applied to it, then there is a good chance that many on the XL product will regrade, which means the product may pay off. Of course being the only provider with a 50Mbps consumer product, will make for ever more enticing adverts, which may help sign-ups to their cheaper products.
While the broadband market is slowing down in terms of new sign-ups, this is to be expected as the majority who probably want broadband are already signed up. What has happened in the last six months is that people are looking around for cheaper deals, and people are looking at how they use their broadband and curtailing some activities if it can save them money. Getting people to spend more on faster broadband with a market in that state will be interesting to watch.