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Virgin Media says showing good resilience
Reuters
Saturday, November 08, 2008 11:27:54 AM Oman Time
 
 
 
 
 
LONDON: British cable operator Virgin Media said on Thursday it added a net 8,300 new customers in the third quarter and was showing good resilience in the face of the economic slowdown.

And looking ahead, Chief Executive Neil Berkett told Reuters he was happy with current market forecasts for the full year and that October had showed the same pattern as September.

The key cash flow measure, operating income before depreciation, amortization and other charges (OCF) fell to 325 million pounds ($515 million) from 342 million but was in line with forecasts.

Analysts had been expecting OCF of 326 million pounds and net additions of 7,000 according to a poll of 8 brokers supplied by the company.

Revenues totalled 991 million pounds, down from 1.006 billion a year earlier and just short of forecasts for 1 billion.

"In the face of a slowdown in the general economy, our business has shown good resilience," Berkett said in a statement, adding that he thought the slowdown could impact the lower end of the broadband market more than the faster service that Virgin offers.

The group, which this week resolved a long-running channel dispute with pay-TV rival BSkyB, said it had 37,800 net new additions to its television service and 68,700 net new additions to its broadband offering.

Customers already taking one service can add additional services such as broadband or telephony, meaning the individual product additions are often higher than the net adds.

Average monthly churn, or the number of customers dropping the service, was 1.5 percent compared to 1.7 percent a year earlier and Berkett said the voluntary churn figure for those who chose to drop the service - ie not because they had moved house - were even lower .

Virgin Media, which formed from the merger of NTL, Telewest and Virgin's mobile phone division, has touted its high-speed broadband product and its catch-up TV service as "hero products" which will help to keep customers loyal.

It said the number of customers taking the top-tier broadband product was up 78 percent year on year and it had seen record video on demand use, with 45 million average monthly views.