Virgin Media suffers growing pains as Cable Cowboy daddy settles in
Life under Liberty Global: Flat sales, big operating loss hit UK telco's Q3
Virgin Media reported flat sales and an operating loss to the City this morning as the telco adjusts to living under the roof of cable giant Liberty Global.
It said revenue stood at £1.02bn during the company's third quarter ended 30 September 2013, while restructuring costs relating to Liberty's summer takeover of Virgin Media hit the ISP's bottom line.
The firm said it had lost £46m in operating costs during the period as it continued to integrate its business with the European outfits owned by its parent company, which is run by American billionaire John Malone, AKA the Cable Cowboy.
Virgin Media said today it expected to splurge more cash on the restructuring process into 2014.
It added: "Operating income for Q3 has also been affected by higher depreciation and amortisation costs, higher stock-based compensation expense, and the impairment of certain network assets."
On the commercial front, Virgin Media added that its growth had been knocked by increased competition, particularly from its rival BT - which launched a new sports TV channel in August.
The telco also reported a big net loss of its "revenue generating units" (RGU) in Q3 compared with the same period a year earlier.
It said that it had added 30,200 internet subscribers to its network to the end of September this year, down from 56,900 in 2012.
Thousands of telephone and TV customers unplugged from the service during the quarter.
Virgin Media said:
Customer and RGU growth were both lower compared with Q3 2012 which had been helped by our broadband speed upgrade and associated marketing, as well as the launch of our triple play 'Collections' bundles in April 2012.
The company's total number of subscribers on its books for all its products still stands at close to 4.9 million people, due to a slowdown in uptake of Virgin Media's products. It said that 13,500 customers signed up to the ISP services in its third quarter, compared with 39,500 in the same period last year.
Liberty Global also coughed to a quarterly loss of $830m, after its debt burden increased as Malone continued to expand his cable empire from the US into Europe. ®