February 14, 2014

Virgin Media 2013 financial results

From the Liberty Global financial report:

In 2013, we increased the number of customer relationships and product subscriptions, or RGUs, with momentum improving in H2, as well as sequentially from Q3 to Q4. This growth was partly the result of an improvement in customer churn in Q4 following the launch of BT Sport on our TV platform along with other enhancements to our bundles and our service. The impact of improvements in our services is apparent from the most recent data published by the independent industry regulator, Ofcom, which found that we generate the least complaints of all broadband and telephony providers in the U.K. Churn for Q4 was at 14.0% on an annualized basis,18 which was fractionally higher than last year. In addition, we improved Average Monthly Revenue per Customer Relationship by 2.5% to £48.21 in Q4, the highest total in the U.K. market, driven by price increases during the year and continued success in upselling customers to higher value products. In Q4, the company announced an average price rise of  6.7% which is currently being implemented.

Our internet subscribers increased 103,500 in 2013 driving internet revenues up 9%, with Q4
representing our strongest subscriber growth of the year. Of all of our 4.4 million internet customers, 3.2 million, or 74%, subscribe to superfast broadband services of 30 Mbps or faster, an increase of 1.0 million in twelve months, including a 209,300 increase in Q4. We continue to see that nearly half of our new internet customers subscribe to speeds of 60 Mbps or higher, showing the strong, ongoing demand for faster speeds. We will again demonstrate the power of our network during 2014 with another significant speed increase beginning in February, when our top tier increases to 152 Mbps, twice the speed of VDSL products offered by competitors.

During Q4, we experienced a return to overall television subscriber growth after three quarters of losses. Strong uptake of TiVo continued throughout the year, as we added 628,800 customers, including 136,900 during Q4. The TiVo service is in 2.0 million homes or 52% of our television subscriber base. The growth of TiVo has helped drive growth in paying TV customers, which increased by 56,000 during 2013, including 18,600 in Q4. We continue to enhance the value of the service and during Q4 we
extended Virgin TV Anywhere to Android devices and added more live streaming channels to make it the most comprehensive cloud-based entertainment service offered by any U.K. pay TV provider.

In December 2013, we extended our range of triple-play bundles with the launch of our “Essential Family Collection” which combines 30 Mbps broadband and our XL TV service with TiVo and BT Sport. We ended 2013 with 2.5 RGUs per customer and triple-play penetration of 65.7%. 

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