Virgin Media loses 47,000 customers as row with Sky continues

BY A CORRESPONDENT

17 May, 2007: Virgin Media has disclosed that its dispute with rival BSkyB has resulted in a loss of 46,900 customers in the first three months 2007.

Virgin Media, rebranded from NTL after the cable operator bought Virgin Mobile and Telewest in 2006, said only 184,300 customers had signed up in the first quarter of 2007 compared with 213,500 in the last quarter of 2006.

An operating loss of £15.3 million in the first quarter of 2007 saw overall revenue fall by 5% to £1.02 billion.

Virgin Media suffered losses despite a £25-million re-branding campaign in which the company offered its quad-play package of television, mobile phone, landline and broadband internet services.

BSkyB withdrew its basic channels at the end of February 2007 when the two groups failed to agree on contract renewal terms.

Virgin Media’s net customer loss – which takes into account the number of new customers minus those leaving the group – was made worse by poor performance within its fixed-line telephone offering and increased competition in the market.

Virgin Media has been registering net customer losses since the second quarter of 2006. The company says it expected this slide to continue into the second quarter of 2007.

The number of customers deserting Virgin Media rose to 1.6% from 1.3% in the first quarter of 2006.

Virgin Media said the full impact of the customer loss resulting from the recent row with BSkyB was yet to be felt as customers are required to give 30 days’ notice to cancel contracts.

Steve Burch, chief executive of Virgin Media, said the company’s decision not to agree to Sky’s renewal costs is better for the company in the long run.

Viewers of Virgin Media lost hit shows, including 24 and Lost, mid-series when the Sky basic channels were withdrawn on the midnight of February 28, 2007, after talks broke down between the two firms.

Virgin Media has since launched court proceedings against BSkyB in an attempt to resolve the dispute.

Virgin Media says that BSkyB attempted to double the price for its basic channels and is using its dominance in the market to stifle competition. Sky has strongly denied these charges.