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Virgin Media Q3 results boosted by broadband subscriber growth

In its Q3 results, the struggling cable operator says it will increase focus on its broadband offering.

Figures released today indicate a turnaround in subscriber growth.  In total, it netted 13,000 new customers in the quarter, compared to a loss of 70,300 customers in the previous quarter.

A rebranding of NTL/Telewest and Virgin Mobile to “Virgin Media” earlier in the year did not pay off for the company, despite offering a range of “quad-play” packages that include digital TV, broadband, phone and mobile.   A spat with Sky over renewal of showing basic Sky channels (including Sky One) did not help, and lead to an extra dose of customer exits, many to its chief rival.

However, the tide may be turning for Virgin Media, in broadband at least.  The number of total broadband net additions was 122,900, compared with 50,500 in the previous quarter.

Virgin Media bosses recently conceded that they cannot compete with Sky in the Pay TV market, but will focus on its broadband service.  It can potentially provide higher maximum speeds than ADSL through its fibre-optic cable network and trials are already in place for up to 50Mbps services.

Neil Berkett, the group’s former chief operating officer and acting head, said, “Our third quarter results show a significant turnaround in customer and RGU growth with our best customer, broadband and telephony growth since the cable merger in March 2006.

“With the cable merger integration expected to be complete by year end, we can focus on continuing to improve the fundamentals, enhancing our products, reducing our churn, and delivering on our competitive strengths.”

Manoj Solanki of SeekBroadband.com, comments, “Virgin Media does have great potential in its fibre-optic network for higher speed broadband services.  However, a higher headline speed may not be enough to win customers over.  It has conceded that it cannot compete with Sky in the Pay TV market, but it will have to compete with Sky and other rivals on broadband, unless it can distinguish itself with a new and compelling product.”

Related links

• Virgin Media website