Weekly NDM Story ..

Virgin Media falls behind as rivals BT and BSkyB sign up more customers

http://www.theguardian.com/media/2014/feb/14/virgin-media-bt-bskyb

Virgin Media is feeling the pinch from the pay-TV war between BSkyB and BT, signing up fewer TV and broadband customers than its rivals in the final three months of 2013. The cable TV and telecoms operator added 18,600 pay-TV customers and 39,100 broadband customers in the three months to the end of December. This compares with BSkyB, which added 77,000 TV subscribers, although half are believed to be for its internet service Now TV, and 110,000 broadband subscribers during the period. BT's multi-billion pound drive into top-flight sports rights, including Premier League football, helped it add 70,000 TV customers and 150,000 broadband customers.

• Virgin Media's revenue growth all but stalled in the fourth quarter, up just 0.4% year on year to £1.03bn, worse than analysts expected and much slower than its rivals BT, Sky and TalkTalk.
• The company said a £200m-plus deal to offer BT Sport's channel to its 4 million TV customers, and a rate increase in premium content it gets from BSkyB, weighed on profits, which fell from £446m to £424m year on year.

However, Virgin Media said the BT deal had proved to be a winner with customers by reducing its churn rate, the proportion of customers cancelling subscriptions during the quarter, to 14%. In the previous quarter the company had lost 8,000 pay-TV customers. Average revenue per user, a key metric watched by investors and analysts, rose 2.5% to £48.21 in the fourth quarter. The company said this was a record level, driven by price rises and successfully upgrading customers to higher value products and packages.

• An impressive 65.7% of customers take three services from Virgin Media – such as TV, broadband and telephony – well ahead of the 36% of BSkyB's customer rate. Virgin Media said the number taking its super fast 30Mb-plus packages grew 209,300 in the final quarter.
• A total of 3.2 million, or 74% of its 4.4 million internet base, now take fast broadband service of 30Mb or more.

"We continue to see that nearly half of our new internet customers subscribe to speeds of 60 Mbps or higher, showing the strong, ongoing demand for faster speeds," the company said. The number of customers with TiVo, the company's advanced TV service, grew by 136,900 in the fourth quarter and is now in 2 million of its 3.7 million TV subscribers. "The strength of our consumer cable business is clear, with strong financial fundamentals and improving operational momentum towards the end of the year, even with heightened competition," said Tom Mockridge, chief executive of Virgin Media. Mockridge, the former chief executive of Sun and Times publisher News UK and Sky Italia, was hired after John Malone's Liberty Global took over the company in a £15bn deal in February last year. A Virgin spokeswoman points out that its cable network only covers about half the number of homes that BT, Sky and TalkTalk can reach, meaning that it does not expect to be able to sign up the same level of broadband and TV customers as its rivals in each quarterly period.