news


Sluggish Virgin Media weighs down Liberty Global

Virgin Media

A slow and stodgy performance from Virgin Media has dampened financial performance across the Liberty Global group, but the UK is not alone in the naughty corner.

Across the group, revenues were up a paltry 1.6% to €3.664 billion and the blame has been laid at the front door of the Virgin Media offices. That said, weak performances in Switzerland, as well as a sluggish mobile market in general, won’t have helped. Although this is a bit of a downer, it should be worth noting the majority of performances by the major MNOs across Europe has largely been positive.

Part of the weight here has been put down to competition in the UK. Discounted offers to attract new customers, which could be deemed a success, had a heavy impact on ARPU across the first three months of the year, and this trend has continued into the second period. That said, you can only build a solid business with enough customers, and the Virgin Media team has claimed to have delivered 32,000 broadband additions in what it is stated as the weakest period of the year. Not bad.

In terms of the numbers, the UK accounted for £1.137 billion, an increase of 1.6%, but the Irish business pulled back 2.7%. Virgin Media grew by 1.3% across the quarter, which is neither good or bad. The mobile business was the bad boy here as it declined 8.3%, though broadband revenues were up 2.2%.

Looking at the customer base, the number of homes passed increased to 14,541,500. The team now has ‘customer relationships’ with just over 5.8 million people in the UK, with the average customer taking 2.45 services off Virgin Media. The numbers might not be on the same level as BT, but from a convergence perspective, it does make for good reading.

That said, it should be worth noting that this is not necessarily going to improve financials notably. Your correspondent is a Virgin Media customer, subscribing to broadband, a telephone line and video services. Technically, this subscription accounts for three services from Virgin Media, but the price difference between broadband as a service alone, and all three is nothing. It seems obvious when you read it, but it is worth making a small reminder about the small print every now and then.

The number which is a more accurate indicator of convergence performance is 18.9%. This is the percentage of customers who have a broadband-mobile bundled deal. These are the two product areas which actually generate cash, and while 18.9% isn’t a bad number, it’s not exactly setting the world on fire.

The network itself will also get a bit of a sharpener for the rest of the year as well. Virgin Media claims to have the intentions to invest £200 million over the course of 2017 on network capacity and other upgrades to meet data demands. Again, it’s a nice number, but middle of the road.

This might explain why the results are relatively mediocre. The team is not doing anything out of the ordinary to capture the interest of the consumers. It’s doing very average things, so getting a very average performance. When you compare to the movers and shakers worldwide, it’s a relatively low-end investment.

  • Cable Next-Gen Technologies & Strategies


Leave a comment

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Polls

How have open source groups influenced the development of virtualization in telecoms?

Loading ... Loading ...