Virgin Media broadband add 5,100 customers in Q1, hit by slow-down

UK cable internet service provider, Virgin Media released the Second Quarter 2009 results. Total revenues were at £936m, showing a marginal decline from £940m in Q2 2008. Cable ISP’s triple-penetration climbed from 53.1% to 58.3% year-on-year.

Virgin Media has just added 5,100 new broadband connections to 3,980,900 in the three months ended June 30, 2009. This compares to the net broadband additions of 47,300 in Q1 2009 and 54,600 new connections in Q2 2008.

The largest consumer broadband ISP says the net additions were slowed by the lower gross additions and seasonally higher churn driven by students. Virgin Media continued to focus on the growth in its high-speed broadband products, like XXL. The over-all slow down in UK broadband consumer market and the weaker economy in general contributed to the below than average results of the company.

However, the broadband service provider’s focused approach on its high-speed broadband packages seemed to yield positive results as the number of new customers for its 20Mbps and 50Mbps broadband services grew by by 37% to 454,400 in the last twelve months. The fastest ISP in UK also reports that it has upgraded 174,900 customers on its 2Mbps package to 10Mbps faster speeds by the end of the quarter. Now, the aggregate headline speed has almost doubled (47%) to 26,358Mb/s during the last 12 months, Virgin Media said in a statement.

Neil Berkett, Chief Executive Officer of Virgin Media, said:

“I am pleased to report strong consumer on-net revenue growth and record ARPU during another quarter of solid financial performance. Our strong free cash flow is underpinned by good cost control and a high quality customer base. This reflects the success we have had in delivering and monetizing a compelling and highly competitive consumer proposition which exploits our strengths in broadband and video-on-demand. The growth outlook for the second half of the year remains strong.

“We have now reached a landmark milestone with the completion of our next generation network, which successfully demonstrates our drive to redefine the high-speed broadband market in the UK. More than 12 million homes now have access to 50Mb broadband, the fastest commercially available product in the UK, and we continue to innovate with our customer pilot of 200Mb.

“Our successful bond issues, over the last few months, reflect the market’s confidence in our business and growth prospects. We believe we remain well-positioned to meet the wider economic challenges and to continue to provide our customers with more reasons to choose Virgin Media.”