Virgin Media Q2 results show marginal broadband growth
Virgin Media has released it's Q2 financial results covering April to June 2009. On-net broadband customers (those connected via Virgin's cable broadband network) rose by just 5,100 customers, and off-net fell by 1,300 giving a total broadband customer increase of just 3,800 in the last 3 months.
Brighter broadband news saw the completion of the roll-out of 50Mbps broadband which is now available to the entire customer base. 2Mbps customers continue to be upgraded to 10Mbps with 385,000 customers completed so far bringing the total number of customers with 10Mbps broadband or faster to 1.75m of the 3.98m broadband customers.
Generally, things look well at Virgin. They have a record penetration of triple-play services (customers who take television, telephone and broadband) which stands at 58.3%, up from 53.1% at the same period last year. ARPU (average revenue per user) has also increased to a new high of £43.27 up from £41.68 last year.
"I am pleased to report strong consumer on-net revenue growth and record ARPU during another quarter of solid financial performance. Our strong free cash flow is underpinned by good cost control and a high quality customer base. This reflects the success we have had in delivering and monetizing a compelling and highly competitive consumer proposition which exploits our strengths in broadband and video-on-demand. The growth outlook for the second half of the year remains strong.
"We have now reached a landmark milestone with the completion of our next generation network, which successfully demonstrates our drive to redefine the high-speed broadband market in the UK. More than 12 million homes now have access to 50Mb broadband, the fastest commercially available product in the UK, and we continue to innovate with our customer pilot of 200Mb."Neil Berkett (CEO), Virgin Media
Next quarter's results will be interesting as they will show if Virgins broadband base is in decline. If the current trend continues, they will be recording a net loss. Q1 2009 saw a net increase of on-net broadband customers by 47,300 and with just 5,100 this quarter, there may be some worried faces at Virgin. Their explanation is that it is a seasonal 'end-of-term student churn', however it is funny how the numbers didn't look quite so bad last year (54,600 net additions) or in 2007 (45,800 net additions). The full financial details are available on the Virgin Media Press Office website.