Virgin Media lose 70,000 customers

Aug 9 2007 by Alistair Houghton, Liverpool Daily Post

VIRGIN Media has revealed the impact of its row with BSkyB after cable and broadband customer numbers fell by 70,000 in the quarter to June 30.

The group, which has well in excess of 100,000 television, phone and broadband customers in Merseyside, estimated 40,000 of the subscribers were lost because of Sky’s removal of its basic channels from the Virgin Media television platform on March 1.

The two companies failed to agree terms on pricing for the channels, including Sky One and Sky News, but Virgin said yesterday it expected the impact of the row to be contained within the second quarter.

Virgin, which has about 2,000 employees in Merseyside, has sought to bolster its own content offering with initiatives including a partnership with sports broadcaster Setanta.

Virgin’s customer base stood at 4.7m at the end of June 30, down 70,300 on the previous quarter and causing consumer revenues to fall to £619.3m from £637.3m reported for the first quarter this year.

The company, formed from mergers involving Telewest, NTL and Virgin Mobile, said it remained the UK’s largest residential broadband supplier, with 3.5m subscribers.

BT has around 3.8m broadband customers, but an estimated 700,000 of those are from the business sector.

Fixed-line telephone subscriber losses in the quarter were 56,900, which was an improvement on the 63,400 reverse seen in the first quarter.

Virgin said it had changed the way it markets and sells its telephone packages, in an effort to reverse the recent poor performance of the operation.

Overall, the group posted operating profits of £3m, against operating losses of £15.3m a year ago.

Virgin Media chief executive Steve Burch said: “The second-quarter results show encouraging broadband and mobile contract growth, a resilient performance by our TV business and signs that our fixed line telephony business is starting to react to renewed management focus.”

On Tuesday, Virgin Media said it had given potential bidders more time to put together their takeover plans after receiving “strong” interest in a possible deal for the firm.

A month ago, Virgin said it had received a takeover offer for the business, a £5.5bn move which analysts say is thought to have come from private equity firm Carlyle.

alistairhoughton