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NTL:Telewest blames customer losses on competition

Revenues up:losses up too

The smart choice: opportunity from uncertainty

NTL's merger with Telewest helped boost Q2 revenues 83 per cent to £884.3m, the network reported today.

Losses from continuing operations were up too though, hitting £206m, from a £56.3m loss in 2005. Net loss was £195.8m compared to income of £73.5m a year ago.

After 25,800 new cable punters came to NTL in Q1, 18,900 upped sticks and left the network in Q2. NTL said the deserters were expected because of increased competition, an active housing market and its strategy of attracting "quality" custom. Average revenue per customer (ARPU) rose 71 pence on Q1 to £42.21.

CEO Steve Burch said: "Consumer revenue, OCF, ARPU, RGU per customer and triple play penetration have all improved sharply as we focused our strategy on acquiring profitable quality customers. As expected, this did impact overall customer levels slightly."

He added that the anticipated cost savings from the March merger with Telewest are on target to reach the £250m target by the end of 2007, with £15m slashed in the first full three month period as one company.

NTL's broadband offerings attracted 104,900 new punters in Q2 2006, compared to 191,400 in the previous quarter and 149,800 in the same quarter last year. Its full triple play has been taken up by 37.1 per cent of customers, up slightly on the 34.9 per cent that had gone for it by the end of Q1.

NTL's net debt mountain now stands at an accountant-aneurysm-inducing £5.396bn. Compared to BSkyB, which recently announced annual pre-tax profits of £798m on revenues of more than £4bn, NTL looks feeble at this stage. The success of its impending Virgin-branded quad play will be microscopically scrutinised.

NTL's financial statement is here (.pdf).®

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