Virgin Media UK Grows to Reach 4.49 Million Cable Broadband Users

Cable ISP Virgin Media UK, which is currently in the process of being sold to Liberty Global (LGi) for an enterprise value of approximately £15bn, has reported its latest Q1-2013 financial results which saw their total broadband subscriber base grow by +25,500 in the quarter (down from +51.6k in Q4-2012) to total 4,490,500.

As always the majority of Virgin Media’s internet access subscriber growth comes from its superfast cable (DOCSIS/EuroDOCSIS) platform (total 4,309,600), while their slower non-cable Virgin National (Virgin.net/ADSL2+) based broadband users fell from 192,800 in Q4-2012 to 180,900 now (-11,900).

Meanwhile 2.5 million of Virgin’s cable customers (up from 2.176m in Q4-2012 and 1.8m in Q3-2012) now take one of the operators superfast broadband (30Mbps to 120Mbps) connections, which represents 58% of their cable based internet access subscribers. Much of this is as a result of the on-going £110m double speeds upgrade (85% of their network has now been upgraded).

Neil Berkett, CEO of VirginMedia, said:

“We have had a good start to the year with accelerated revenue growth, improved churn, and strong free cash flow growth. The great value we provide through our Collections packages, which bundle superfast broadband and our next generation TiVo service, has seen new customers join and our existing customers stay loyal to us. This positive momentum in the business positions us well for our planned merger with Liberty Global.”

It’s worth pointing out that Virgin Media has also signed a “significant” ten-year deal with O2 (Telefonica UK) for the provision of backhaul to 1,500 sites. In addition they also secured another “significant” five-year backhaul contract with rival ISP Sky Broadband.

On top of that VM has gained “significant orders” under a framework agreement to support the creation of a UK-wide Aggregation Network for “another large UK mobile network operator“. As a result Virgin Media now have material backhaul contracts with all the UK mobile network operators.

Virgin Media noted that its revenues were also up 3.6% to £1,043m, although they’re still home to a debt mountain of £6,111m.