Virgin Media returns to growth

Virgin Media is hoping for a significant boost to its video-on-demand viewing when the BBC’s iPlayer catch-up service launches on the cable network in April.

Announcing fourth quarter results in which it made progress in stemming customer defections but reported higher losses, the group said the BBC would be promoting Virgin Media as the only platform where iPlayer programmes could be seen on television.

“That’s when our superior network really starts to shine,” said Neil Berkett, acting chief executive, highlighting plans to upgrade broadband speeds in the next year. Half of its customers already watch an average of 22 programmes on-demand each month, he said.

Fourth-quarter results showed monthly churn fell from 1.7 per cent to 1.4 per cent as the group shifted its focus to keeping existing customers rather than attracting new ones.

Net customer additions improved from 187,000 to 272,000, their highest level since the company was formed from the merger of NTL and Telewest, as it cut telephony prices to stem customer losses seen in the first half.

However, Virgin Media took a smaller share of new broadband customers than in the previous quarter, with broadband net additions down from 123,000 to 111,000.

Mr Berkett said it had concentrated on upgrading people to its “top tier” product. Average revenue per user on its cable network increased from £41.55 to £42.24 over the quarter, helped by one-off pay-per-view sports revenues.

The net loss for the fourth quarter rose from £122m to £163m but currency movements contributed to a lower full-year loss than in 2006, at £464m, down from £534m.

Asked why Mr Berkett still held the title of acting chief executive, more than six months after replacing Steve Burch, Jim Mooney, chairman, said the board had wanted to see “a couple of quarters of performance” before making its decision.

“I’m sure the board will be meeting shortly to discuss that,” he said. “You can kind of see the results.”

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