Virgin Media is squeezed as its revenues start to slow

 

Virgin Media is feeling the squeeze on multiple fronts as the American-owned firm saw slower revenue growth and it won fewer pay-TV and broadband customers than BT and BSkyB.

Virgin added 39,000 broadband subscribers and 19,000 pay-TV customers in the last three months of 2013. That compares with BT, which won 150,000 in broadband and 70,000 in TV, and Sky, which got 110,000 in broadband and 77,000 in TV.

Virgin, owned by John Malone’s US media giant Liberty Global following a £15bn takeover, saw revenues rise only 0.4 per cent to $1.66bn (£998m) in the quarter. Growth for the full year was cut to 2 per cent as a result.

The real squeeze looked to have been in business services, where revenues tumbled more than 10 per cent, and in mobile. Mobile subscribers fell by 41,700 as Virgin shed cheaper pre-pay customers, which offset growth in contract deals.

Virgin, which has 4.9 million customers, said the “continued pressure” on the mobile and business divisions “offset” growth in cable revenue from broadband and pay-TV, which benefited from price rises a year ago.

Those close to Virgin claimed cable growth was evidence that it is not suffering at the expense of BT, which began offering free live Premier League games to its broadband subscribers last summer.

However, analysts at Jefferies bank were unimpressed as they contrasted Virgin’s performance with BT’s “very strong” broadband numbers, in particular.

Jefferies described Virgin’s increase of 0.4 per cent in quarterly group revenues as “a material shortfall” as it was below their expectations.

BT returned to growth with sales up 2 per cent in the last quarter. BSkyB was up 5.2 per cent and low-cost rival TalkTalk was up 5.1 per cent. Virgin insisted its performance was consistent as it was not trying to chase customer growth. But Liberty admitted its group revenue and cash flow growth were higher without Virgin.

Mr Malone, dubbed Darth Vader because he is known as a demanding boss, may take some comfort from forecasts from analysts at Pivotal Research Group, which reckoned profits should “accelerate” in 2014.

Virgin’s chief executive, Tom Mockridge, maintained it had “strong financial fundamentals and improving operational momentum towards the end of the year, even with heightened competition”.

Mr Mockridge, the former boss of News International and Sky Italia, who joined last summer, said Virgin had persuaded more new and existing customers to pay for TiVo pay-TV and superfast-broadband, which brought in more revenue. TiVo customers were up 137,000 and super-fast broadband deals rose 209,000.

Liberty Global has been on an acquisition drive to build a pan-European telecoms and TV business, buying Ziggo in the Netherlands and bidding for Ono in Spain in recent months.

Mr Mockridge said being part of Liberty was helping Virgin and it is “working across Europe” to share talent and resources within the group.

Virgin remains Britain’s second-biggest pay-TV firm, behind Sky but well ahead  of BT.

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
Arts and Entertainment
Friends is celebrating its 20th anniversary this year
tvSeries celebrates 20th anniversary
News
news
Life and Style
Jack Cooksey goes for the grand unveiling - moments before dropping his new iPhone 6 on the floor
iphone launch
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Sport
Yaya Touré (left) and Bayern Munich’s Spanish defender Juan Bernat
football
Arts and Entertainment
A spell in the sun: Emma Stone and Colin Firth star in ‘Magic in the Moonlight’
filmReview: Magic In The Moonlight
Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Audit Manager Central Functions

To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week