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Virgin Media loses customers in BSkyB row

Virgin Media released their second quarter results today, showing a churn of 70,300 customers.

The group estimates that around 40,000 of these customers were lost due to the row with BSkyB over pricing of basic Sky channels.  This lead to the withdrawal of Sky’s basic channels from Virgin Media TV on March 1 2007.

Consumer revenues were affected and fell by 18 million to £619.3 million compared to the previous quarter (Q1 2007: £637.3 million). Virgin Media however remains upbeat and expects the higher than usual customer churn to be contained to this quarter.  It hopes that offerings such as the sports channel partnership with Setanta, and VOD (Video On Demand) services will help to bolster the company’s current situation.

The group added 51,000 broadband customers in the quarter, and continues to be the largest residential broadband provider at this time.   It is currently upgrading all of its network to offer speeds of 20Mbps on its top tier package, which is currently 10Mbps.

It also recently signed a wholesale agreement with Cable & Wireless as an LLU broadband provider which will give them access to an additional 4 million homes that are outside of its cable footprint.  This will enable them to offer quad-play services (TV, broadband, phone, Mobile) to a larger consumer base.

Steve Burch, Chief Executive Officer of Virgin Media, said:

“The second quarter results show encouraging broadband and mobile contract growth, a resilient performance by our TV business and signs that our fixed line telephony business is starting to react to renewed management focus. The new partnership with Setanta, the planned launch of sports and entertainment channels and our growing VOD platform makes us the superior pay TV offering in the country.

“Along with our enhanced broadband portal, we have significantly improved our content offering; while improved product bundling and further merger benefits mean the cash outlook for the rest of the year and beyond remains strong.”