Even in good times Virgin Media has had a problem making profits. The downturn has made it even tougher. The company’s first-quarter net loss increased to £154 million ($232 million) from a net loss of £104.4 million ($157 million) last year. Most of the increased loss was due to a swing from a profit to a loss on its derivatives investments, a negative swing of £54.6 million ($82.2 million).
However, operating income turned positive with £13 million ($19.6 million) in the quarter compared to a loss of £1.9 million ($2.86 million) a year ago. Total revenue, excluding revenue from home shopping business Sit-Up that it sold on April 1, decreased to £935.7 million ($1.41 billion) from £947.3 million ($1.43 billion) last year. The revenue decrease was due to declines in the mobile phone and business sectors.
The good news was that the number of broadband subscribers increased by 42,300, but that was less than the 80,600 in the year-ago quarter. Its total is now 3.98 million; 75% of subscribers have 10 Mbps or faster, compared with just 25% last year; Virgin expects to complete the rollout of an ultra-fast 50 Mbps service throughout its system in the third quarter.
The company is upgrading subscribers from 2 Mbps to 10 Mbps and will shortly begin testing 200 Mbps with consumers. The number of fixed-telephony users rose by 12,600 in the quarter to 4.22 million.
Revenue per customer continued to rise, albeit only slightly, to £42.29 ($63.63) from £41.95 ($63.13) last year. Most of the increase due to higher prices and subscribers upgrading to faster broadband.
Virgin added 30,600 pay-TV subscribers, down slightly from the 36,800 it added a year ago. It added 41,499 digital TV subscribers, down from 57,900 a year ago. Churn was at a record low of 1.1% and it added 62,900 mobile phone subscribers, up from last year’s 59,400.
This article ran first in the Rider Research publication The Online Reporter.