Virgin Media Q1 revenue climbs as signups fall

Virgin Media saw total revenues were up 5.7 per cent in the company's first quarter ended 31 March 2011, despite a dip in the rate of increase of its customer base.

It pulled in £982.3m in Q1, compared with £929.4m for the same period a year earlier. The company delivered operating income of £110.6m, up on 2010's £69.6m.

However, it added fewer new cable customers than during the same quarter in 2010.

Virgin Media said it grabbed 20,200 net new cable customers in its latest Q1, compared with 38,300 in the same period last year. It now has 4.8 million UK cable subscribers on its books.

Demand for faster broadband has improved, the company said.

"In February, we unveiled a new 30Mbit/s 'XL' tier in place of the existing 20Mbit/s tier for new customers. This will create further differentiation from our DSL competitors which struggle to deliver more than half the headline speeds they advertise," it said.

"We now have over 150,000 customers on our 50Mbit/s tier, more than twice as many as a year ago and a 33 per cent increase since the year-end. We are also in the process of rolling out the country's fastest broadband service, 100Mb, which is now available to two million of our cable homes and on track to be available right across our network by mid 2012."

The company credited take-up of its faster broadband speeds and pay-TV for bolstering Virgin Media's latest results, even though it added fewer customers during the quarter.

Virgin Media's new TV service customers dropped by 70 per cent to just 10,100 for the quarter, compared with 35,700 in the same period in 2010.

Sales in the firm's mobile phone division rose 3.8 per cent in Q1 with the company recording steady growth in mobile contracts.

Biz revenue was brisk, with a 13.7 per cent increase to £159.1m, thanks to a climb in data revenues in Virgin Media's retail and wholesale markets.

Net income from continuing operations for the quarter was £4.5m compared to a loss of £163.3m in 2010's Q1.

"The improvement was mainly due to increased operating income, gains on derivative instruments and foreign currency gains, which arose due to sterling strengthening versus the US dollar during the quarter," Virgin Media said.

The company added it will soon start testing broadband speeds of "up to" 1.5Gbit/s in partnership with four companies based in east London's 'Silicon Roundabout'. ®