Virgin signs up record ultrafast broadband subs
Revenue up in Blighty, but still playing catch up with BT on triple play
Sales at Virgin Media rose 3.2 per cent to £1.2bn for the UK broadband provider's second quarter compared with the previous year - as it signed up record ultrafast broadband subscribers.
Operating income fell 24 per cent to £79m mainly due to "increases in related-party fees". Business sales rose 5.5 per cent to £167m, while mobile fell 11 per cent to £105.1m.
The biz recorded an eight-year record in new subscribers, with 31,000 in the UK versus 8,000 loss in in the second quarter of 2015.
That growth was largely due to the business's £3bn "Project Lightning" ultrafast network expansion, which intends to connect four million new homes and businesses with its high-end 152Mbps service by 2020.
This quarter 24,000 premises signed up to the ultrafast network, totalling 72,000 additions for its first half-year results.
Significantly more will come in the second half of the year, noted Megabuyte analyst Philip Carse, with the company re-iterating its promise to deploy ultrafast broadband to 500,000 premises for the year.
Carse said: "This second quarter maintained recent trends of low single digit growth in the core cable business, a decent contribution from Business, continued collapsing mobile ARPUs [average revenue per user] and a big swing factor in Other, mainly handset sales."
Virgin Media head honcho Tom Mockridge said more homes and businesses than ever before are signing up for ultrafast broadband. “Customers are fed up with the slower broadband offered by providers operating over the ageing national telephone network. “The proof is in the pudding. In areas with Virgin Media, more customers moved to us during the quarter than BT, Sky, TalkTalk and Vodafone combined.”
However, Martin Courtney, analyst at TechMarketView, warned Virgin Media will have to play catch up when it comes to competing with BT for single subscriptions for voice, video and data.
He said: "Virgin Media is very gradually migrating more consumer and business customers onto triple-play services that bundle fixed and mobile voice, data, and video/TV elements into a single package, with the percentage of subscribers using fixed mobile convergence platforms also growing at a slow but steady rate.
"But we think the pace of that migration will need to quickly pick up if Virgin Media's triple play services are to prove decisive in the ongoing fight for market share with BT, more urgent now after the latter’s EE acquisition helped grow the telco’s revenue 35 per cent in the second quarter." ®