Virgin Media’s revenue increased 6.4% year on year in the third quarter to £978m, as it announced it would roll out superfast 100Mb broadband from December.
Pre-registration for the service, which Virgin Media (NSDQ: VMED) says will allow customers to download a TV show in 30 seconds or a music album in just 5 seconds, starts today. The news, welcomed by the prime minister, David Cameron, follows last week’s announcement by the government that the BBC would have to pay £300m from licence fee funds to help pay for extending superfast broadband to rural areas.
“We want to see superfast broadband brought to people’s homes and businesses right across the country and this exciting news takes us a step closer towards reaching that goal,” Cameron said.
Virgin Media claims that almost 13m homes will have the potential to access the 100Mb service as it is rolled out nationally next year; London, the south-east and Yorkshire will be the first regions to receive coverage. Virgin Media said it is also continuing to trial a 200Mb service in selected homes.
Overall Virgin Media added 14,100 new customers in the third quarter, taking its total subscriber base to 4.78m. “Triple-play” customers – those taking three products from Virgin – grew to 62.7% of the subscriber base. “Quad-play” customers were 11.5% of the total, up from 10.6% a year ago.
Within its total customer base Virgin Media was able to sign up 33,800 new customers to its broadband in the quarter, taking the total number of subscribers to 4.24m. The company said that more than 700,000 of those now take the 20Mb or 50Mb service, up 41% year on year, and within this more than 90,000 take the 50Mb service, a 24% annual increase.
Virgin Media’s TV base increased by 14,800 in the third quarter to 3.77m customers. More than half use Virgin’s video-on-demand service. The company has increased its portfolio of high-definition channels from one to 28 in a year, including the addition of Sky Sports and Sky Movies, with 222,100 new customers taking the HD offering in the quarter. Overall Virgin Media has 1.4m subscribers to HD, a 38% year-on-year increase.
The company also added we also added more than 100,000 customers taking its Sky premium suite of channels, taking the total to 725,000, including 52,000 who have signed up to Sky Sports HD and, or, Sky Movies HD since launching the channels in August.
Revenue grew by 7% year on year in Virgin’s mobile operation, with contract customer numbers growing 32% year on year to 1.15m. Operating income doubled from £51m to £102m, while average revenue per user grew by 3.7% to £46.38. Operating cash flow (OCF) – broadly equivalent to earnings before interest, tax, depreciation and amortisation (Ebitda) – grew by 11% year on year to £387.3m.
Virgin Media also said that it made net income of £6.7m in the third quarter from its 50% stake in UKTV, the pay-TV operator jointly owns with BBC Worldwide. In the year to date Virgin has made £20.2m in the year to the end of September from its stake in UKTV, which it is understood to be close to selling. Virgin values the stake at £349m, including loans to fund its operation of £113m.
“Our continued focus on exploiting our strategic advantages with the resulting multiple opportunities for revenue growth, as well as robust financial discipline has delivered another strong financial performance this quarter,” said the Virgin Media chief executive, Neil Berkett. “We are extending our lead in broadband even further with the imminent availability of 100Mb as consumer demand for consistently faster broadband grows.”
This article originally appeared in MediaGuardian.