First quarter customer additions at Virgin Media fell by 29,200 to 184,300 as the cable operator felt the first effects of the withdraw of Sky’s basic channels from its network. The total customer base fell 46,900 on the quarter to 4.81 million.
Virgin also pointed to increased competitor activity for the fall, but the impact on churn might have been greater, due in part to the need for customers to give one month’s notice to the operator on canceling their service.
Surprisingly, churn has been reduced to a monthly 1.6% in the first quarter from 1.7% in the previous quarter, though comparisons with BSkyB which is experiencing recent highs in its subscriber losses are difficult, due to differences in the calculating methodology. The fall is due to a reduction in non-pay disconnections. Virgin believes that its own product offerings, such as the Virgin Central VOD channel, will keep churn within previous expectations.
In its first quarter results to March 31, 2007 Virgin Media, formed from the merger of cablenets NTL and Telewest, announced an increase in so-called RGUs (Revenue Generating Units) for the fifth consecutive quarter. Triple play penetration is also increasing up to 42.9% from 34.9% one year ago.
The company has 3,390,000 TV subscribers, including 3,081,100 digital subscribers, compared to 3,353,900 at the end of 2006.
Virgin has doubled the number of subscribers to its V+ digital video recorder to 150,000. A relative latecomer to the technology – Sky last week reported two million households had installed its equivalent Sky+ product – Virgin is doing its best to make up for lost time. 43% of its digital TV base now uses its on demand products on a regular basis.
The cable operator remains in the red with an operating loss of £305.7 million (€449.24m).