Virgin Media’s much-vaunted and heavily promoted four-pronged assault on the media and communications market was foundering on Wednesday as the company admitted to being squeezed by its major rivals British Sky Broadcasting and Carphone Warehouse.

Virgin Media, formed through the acquisition of Virgin Mobile by the cable group NTL last year and boasting Sir Richard Branson as its largest shareholder, reported disappointing figures for the first quarter and warned of worse news to come.