Virgin Group head Sir Richard Branson

Virgin Media grows revenue despite dip in customers

Virgin Media broadband customers spent record sums in Q1, showing a willingness to pay extra for faster connection speeds.

The high speed fibre network has also been in demand for companies, boosting the company's performance.

"What we're seeing is a demand for connectivity," finance director Eamonn O'Hare said.

"Customers want higher quality and higher speed broadband and what this quarter underlines is that they're prepared to pay for it."

Total revenues for Q1 rose  5.7 per cent to £982m and operating cash flow climbed 7.6 per cent to £376m.

However there was a dip in the number of new customers, with 20,000 new new cable customers in Q1 of this year, compared with 38,300 in the same period last year.

Virgin Media, which competes with pay-TV company BSkyB and telecoms and broadband providers such as BT, said more than 63 per cent of its customers took three products from the company.

Quad-play penetration, where a household takes TV, broadband, fixed-line and mobile phone services, increased to around 12 per cent, compared with 11 per cent a year ago.

"Our focus now is to play much more into providing mobiles into our cable base," said O'Hare.

"We have five million customers and only 15 per cent of them take a mobile product at the moment so the focus is to drive in to that other 85 per cent."

The group also said it would begin trialing the world's fastest cable broadband, testing speeds of 1.5 Gb.

Analysts welcomed the solid customer growth and were also encouraged by the mix of new customers, with 39 per cent of new subscribers in the quarter ordering speeds of 20 Mb or higher, compared with just 15 per cent a year ago.

The desire for faster speeds and more pay-TV meant customers were on average paying £46.16 a month, a record for the time of the year.

"Virgin Media's solid Q1 results strengthen our confidence in the sustainability of growth," Goldman Sachs said.

"Customer quality and hence lifetime value continues to improve, business growth is accelerating and mobile growth should improve further."

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