Virgin Media halts customer decline

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Telecoms group Virgin Media said demand for superfast broadband and its new digital television recording service helped reverse a decline in cable customers.

The group, which offers television, broadband and phone services, added 6,300 net cable subscribers in the three months to September 30, compared to a decline of 36,000 in the previous quarter.

Virgin said more than 25 per cent of its 4.79 million cable customers now subscribe for its fastest internet speeds - above 20 megabytes - while TiVo, its recordable TV service, has increased four-fold since the end of July to 222,000 today.

Third quarter operating income rose 26 per cent to £128.4m, but Virgin posted a pre-tax loss of £73.7m after a series of one-off charges.

Virgin said group revenues rose in the quarter by 2.2 per cent to £1bn.

Mobile phone revenues fell by 2.3 per cent to £141.2m from a year ago as the company was hit by reductions in call termination rates introduced by the regulator.

There was a 138,300 drop in the number of pay-as-you-go users, though this also reflected a strategy to focus on contract users where it saw 74,800 net new customers.

Tim Boddy, analyst at broker Goldman Sachs, said the change in customer mix over the three months was was very positive, especially the uptake of TiVo, the number of broadband new users taking the high speed service and the increase in the number of paying TV customers.

Virgin chief executive Neil Berkett said demand for super connectivity is increasing as more people recognise the best digital technology is worth paying for.

For the nine months of the year so far revenues were 3.3 per cent ahead at £2.97bn while profits were £28.9m against a loss of £204.2m.