Cable broadband shines in Virgin Media Q2
50Mbit/s by the end of the year
Virgin Media's recent move to push broadband to the centre of its offering is paying off. The firm announced strong underlying profits today and said it expects its forthcoming 50Mbit/s network upgrade to further distinguish it as a premium/expensive ISP.
Some 19,500 net customers left the firm in the three months to 30 June, but cable broadband subscriptions were up 54,000 on the previous quarter. It now has 3,836,100 total cable and ADSL broadband customers.
Discounting depreciation, amortisation and a one-off charge related to the Virgin Mobile acquisition, underlying operating profit hit £333m, up six per cent and beating expectations. Total revenues actually slid slightly from £995 million a year ago to £990.5m, but VM said efficiency savings improved margins.
Overall churn fell to 1.3 per cent from 1.8 per cent from the same period a year ago, despite price increases and in line with VM's previously announced strategy of hanging on to big spending punters.
CEO Neil Berkett said: "The second half of this year will mark a major milestone as we roll out our unrivalled 50Mb broadband service. We believe this superfast service, combined with our leading video-on-demand product, will prove extremely attractive to existing and new customers."
He might have a point. The number of customers subscribing to the top tier broadband package was up 82 per cent on a year ago. More than 9 per cent of it broadband customers take the current to tier 20Mbit/s service.
Berkett also said that talks with Sky to deliver its basic channels package to cable TV subcribers, were ongoing but so far unsuccessful. Sky withdrew the channels during a public spat over pricing last year that hit VM subscriber numbers hard.
The full report is here (pdf) ®