Virgin Media grows customer base amid superfast broadband rollout
Virgin Media has posted a solid set of results for the first quarter as it focuses its efforts on a £3bn plan to rollout superfast broadband across the UK.
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The figures
First-quarter revenue remained flat on the previous year at £1.3bn.
Operating profit slipped year-on-year to £3m.
New subscribers were up 32 per cent year-on-year.
Why it’s interesting
The update marked a robust first quarter of trading for Virgin Media amid tough competition in the UK broadband market.
The firm gained 59,000 customers in the first three months of the year, boosted by strong growth in its telephone and broadband divisions.
In addition, Virgin Media added 102,000 premises to its superfast network, taking the total number of properties reached in its £3bn Project Lightning plan to 1.7m.
Despite the growth, the firm’s financial performance remained subdued, in a sign of growing competition in the UK’s broadband market from challenger firms such as Cityfibre and Hyperoptic.
Virgin Media has recently launched a new consumer strategy, offering customers bundles combining broadband, entertainment and mobile products, in a bid to boost revenue and cut subscriber churn.
“The UK remains a cut-throat market as underlined in slightly lower cable average revenue per user and flat revenue year-on-year,” said Paolo Pescatore, telecoms analyst at PP Foresight. “Therefore, aggressive promotions are needed to attract new customers.”
“All eyes are now on BT’s full-year results and plans for the forthcoming year; in particular guidance on accelerating plans for the rollout of fibre broadband across the UK,” he added.
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What Virgin Media said
Mike Fries, chief executive of parent company Liberty Global, said: “On the innovation front, we are pushing the envelope in the UK.
“In April, we rolled out compelling new fixed-mobile converged bundles, boosted our top broadband speed to 500 Mbps and launched Intelligent Wifi, a cloud-based adaptive system that's designed to significantly improve our customers’ in-home Wifi experience.”
“Our competitive position remains strong and we continue to extend our reach with Project Lightning, where we are building 400,000-500,000 new premises every year.”