Virgin Media regains customers

It seems that Virgin Media, the struggling cable group, has halted the exodus of customers which commenced when it stopped showing Sky channels on its cable TV network. Virgin customers cancelled their subscription and transferred to Sky after losing channels such as Sky One which broadcasted programmes such as The Simpsons, 24 and Lost.

Virgin Media was created in 2006 from the merger of the former NTL/Telewest cable groups and Sir Richard Branson’s Virgin Mobile. The group hoped to turnaround the home communications market by becoming the first ‘quadruple play’ provider of pay-TV, broadband, fixed-line telephone and mobile services.

Virgin Media added a new 13,000 new customers during the last 3 months against the 70,000 it lost in the previous 3. Its competitor, Sky, gained a net 83,000 new customers in the same quarter.

Neil Berkett, acting chief executive, said the figures were a considerable turnaround but did admit that Virgin still has a lot of work to do. Mr Berkett added that he was particularly pleased with the growth in broadband subscribers, up 123,000.

In the second quarter, operating income increased from £3 million to £47 million in the third quarter, after large interest charges, which have put off prospective private-equity bidders. Pre-tax losses were £61 million compared with £104 million in the same quarter in 2006.

Virgin Media has recently had a turbulent time, a proposed sale of £4.8 billion collapsed and Steve Burch, chief executive was replaced. Furthermore, the group is involved in a messy legal fight with BSkyB, the satellite broadcaster which is 39.1% owned by News Corporation, parent company of The Times.

Finally, the cable group is still facing strong competition. O2 is about to enter the broadband market and Sky recently announced that it has signed its one millionth customer - just 14 months after launching the service.

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