Virgin Revs Up As Broadband Moves To 100Mbps Fast Lane

Neil Berkett, CEO, Virgin Media

Fibre-optic broadband is still Virgin Media’s trump card. October-to-December internet sign-ups beat analyst expectations, helping group revenue up three percent to £980 million.

And now Virgin’s put an “end of 2010″ date on roll-out of a 100Mbps service that’s more than twice as quick as the 40Mbps offering BT announced this month. A further, 200Mbps trial is also due for expansion.

Also today, Virgin announced it would use Brightcove’s player (the third European deal Brightcove’s announced this week) to power news, music and entertainment videos on its virginmedia.com portal, which currently gets 11 million visitors every month.

Company net losses slimmed by 50 percent to £94.4 million. Virgin attributes this to increased operating income and decreased foreign exchange losses, “partially offset by increased loss on extinguishment of debt and decreased derivative gains.”

High-speed migration: Analysts had only expected 45,000 net broadband sign-ups, but Virgin gained 63,000, taking it up to 4.1 million. Virgin has wanted to move customers on to its higher-speed offerings, which it can genuinely differentiate from copper-wire broadband rivals. 98 percent of broadband users now take 10Mbps or faster.

VOD numbers on the rise. The other trump card – cloud-based VOD. Virgin says that its customers watched on-demand content 74 million times each month in October-to-December, with 35 average views per month per subscriber, compared to 30 a year ago. Around 2.1 million of Virgin’s digital TV subscribers are accessing the service now (58 percent of its digital TV subscriber base).

Strong results for triple-play. Now 60.7 percent of its customer base is taking three products from an offering of TV, fixed line, mobile and broadband, supporting the theory that bundles keep people loyal – the company is reporting a very low churn rate of only 1.2 percent. Quad-play bundles are not doing so well: only 10.7 percent of its customers take a service that includes TV, broadband, fixed phone and mobile.

Mobile “third screen” strategy. Revenues from mobile dipped slightly from £141.1 million to £139 million. Virgin’s been trying to shift more of its base away from prepay to contract, which is working: it added 77,100 contract mobile subscribers in the quarter and now has nearly 950,000 people on contracts, up from 649,000 a year ago. Virgin’s looking to offer more content on mobile too, building on from the deal it signed with Disney (NYSE: DIS) last September covering mobile, PC and TV VOD.

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