Higher Q4 Loss for Virgin Media

LONDON, February 28:
Virgin Media’s fourth-quarter loss increased from last year’s £122.1 million to
£163.2 million, but the cable company did lower its full-year loss from £533.9
million in 2006 to £463.5 million and posted significant customer gains.

The quad-play provider saw
its Q4 revenues dip, from £1.08 billion to £1.05 billion, but 2007 revenues
were up 13 percent to £4.1 billion. And on the subscriptions front, Virgin
Media hailed Q4 as its best quarter since the NTL/Telewest merger, with 272,100
net RGU additions, and 24,400 on-net customer net additions. In addition,
on-net churn was down to 1.4 percent. Broadband growth has slowed, with 111,200
additions, down from the previous quarter’s 122,900. But telephony additions
were 52,300, as compared with 13,700 in Q3. TV net additions, meanwhile, were
61,100—three times as many as the 20,400 who signed on in Q3. And finally
Virgin scored 47,500 mobile-contract additions. On-net cable ARPU increased to
£42.24, and triple-play penetration hit a record of 49.5 percent.

Neil Berkett, the acting
CEO of Virgin Media, said: "Our fourth-quarter results represent our best
operational performance since the cable merger in early 2006. They demonstrate
that our customers are responding positively to a compelling consumer
proposition combined with the strength of the Virgin brand. We are achieving
good results from our stated strategy of exploiting our superior network
capability to drive broadband growth and deliver the next generation of
personalized on-demand content, as well as focusing on reducing churn. I am
encouraged by our ARPU performance in what is a competitive market, partly due
to our successful bundling, cross-selling and up-selling. I am also
particularly pleased with the sharp decline in churn, given the extra focus
that we have placed on this area. With a strong brand, superior products, and
improving service and operations, we believe we are well placed for continued
growth and cash-flow generation."

At the end of the quarter,
there were 3.47 million on-net TV customers, of which 3.25 million are
digital-cable users; 3.7 million broadband customers, 4.13 million telephony
subscribers and 376,3000 contract mobile subscribers (not including pre-pay
customers).

—By Mansha Daswani