NTL switches to Virgin to stop customer loss

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The Independent Online

NTL has moved to address customer service issues in its cable television business before it launches an aggressive marketing campaign in 2007 when it will re-brand its services under the Virgin Media banner.

NTL said it lost more than 37,000 customers over the summer months and that churn - the rate at which customers leave the company - increased to 1.8 per cent. However, only 3,000 of those customers defected to rival TV and broadband suppliers, with most of the losses arising as people moved house to areas where NTL cannot provide services.

Steve Weller, at the price comparison service uSwitch, said NTL's churn remains below the industry average of 2 per cent but he expects it to increase further due to rampant competition in the broadband market. NTL invested £5m in the three months to September on improving its customer service functions and added 330 customer-facing staff.

NTL purchased its rival Telewest last year and added Virgin Mobile to its stable earlier this year. Jacques Kerrest, its chief financial officer, said that while Telewest has "world-class" churn rates of 1.4 per cent, it still has work to do to bring NTL's churn in line with that figure.

UBS analyst Aryeh Bourkoff described the situation as "a tale of two systems" with the three months to December representing a transitional quarter before the re-branding of the company.

Mr Kerrest said there will be a significant marketing campaign to launch the Virgin Media brand next year. "It is going to blow your socks off," he said. NTL is the only UK company to offer "quad-play" services that include broadband, mobile, fixed-line and TV as part of one package.