Virgin Media has announced its First Quarter 2011 results and while revenue continues to grow, new customers are down by a whopping 70 percent year-on-year.
In the three months to 31 March, Virgin Media signed up 10,100 new TV customers, which represents a fall of 70 percent from this time last year. Overall the company managed to sign up 20,200 new customers in the first quarter, again a drop of 47 percent from the 38,300 customers signed up in the first three months of 2010. Within its total customer base Virgin signed up 50,100 new customers to its broadband service, down from 72,300 last year. However despite this fall in new customer subscriptions, revenue continued to grow, up by 5.7 percent to £982 million. Average revenue per user also rose by 2.6 percent year-on-year to £46.16.
Considering that the final quarter of 2010 was Virgin Media’s best ever - topping £1 billion in revenue for the first time ever - it’s no surprise that things have slackened off a little. However more worrying will be the slump in new customers which could point to a difficult period ahead. "This has been another solid quarter where we have maintained strong levels of revenue growth and generated substantial free cash flow. As more customers demand better connectivity, we have seen an increase in the take-up of faster broadband speeds and continued to improve the quality of our customer base,” said Neil Berkett, CEO of Virgin Media. Virgin Media is expecting that interest in it next generation TV service, TiVo will grow in the coming months and it is accelerating roll out of the service to the 65,000 customers who have pre-registered.
In related news Virgin Media has announced it will be trialling the world’s fastest cable broadband, testing speeds of 1.5Gbps which is around 240 times the average speed in the UK. Readers in east London take note as the trial will take place in your area though it is initially being rolled out to four partner companies around what has become known as the Silicon Roundabout, near Old Street. The 1.5Gb download and 150Mb upload service will use the same infrastructure and technology as Virgin Media currently uses for residential customers. If successful the tests it will be the world’s fastest cable connection, and similar technology tests have already proven the capability of cable to deliver download speeds of 1Gb.
Why the need for such fast speeds? Well, each of the companies taking part in the trial is involved in the creative industries, working extensively with video for online and mobile streaming, producing interactive applications for the web and bespoke broadcasting services for live programmes and events – all of which are pretty bandwidth intensive. While these speeds won’t necessarily be available in your home any time soon, it is exciting to see what is possible and what could be available in the future.