Virgin Media loses 40,000 customers to Sky
Virgin Media lost 40,000 of its most valuable customers to arch-rival Sky over the past three months as the cable television provider felt the impact of its public spat with the satellite television provider.
Virgin Media lost 70,300 customers in the three months to the end of June and attributed the bulk of customer defections to the carriage fees dispute with Sky. The spat resulted in some of its rival's channels, most notably Sky One that shows the popular Lost and 24 series, being taken off the cable platform. The loss hit Virgin Media's average revenue per user as the bulk of the users that left as a result of the Sky dispute were high-spending "triple play" users that sourced broadband, telephony and TV services from the company.
Virgin also lost customers in the telephony market with nearly 57,000 fixed-line users defecting to other providers. Meanwhile Virgin Mobile's customer base fell 46,500 as it continued to focus on moving more of its low-spending pay-as-you-go users onto contracts. Over the three-month period, the company added over 45,000 broadband users, lower than the near 88,000 it put on in the three months to March.
Yet Virgin's management was in a bullish mood arguing that the impact of the Sky dispute has now been washed out of the system. Neil Burkett, the chief operating officer of Virgin Media, said he was "quietly confident" that the slide in customer numbers had ceased and that the disagreement with Sky had not damaged the Virgin brand. He said that the "storm of the second quarter" had blown over and that the vast majority of customer defections in both television and telephony had occurred early in the quarter.
Mr Burkett challenged a recent research report compiled by Enders Analysis that suggested the company's "quad-play" model - based on the assumption that consumers want to source broadband, television, fixed-line and mobile telecoms services from one supplier - was failing. He called the research "premature" and said: "It's going very well. The upside in the short-to-medium term is substantial." He expects Virgin Mobile's new management team, led by ex-3 marketing director Graeme Oxby, to fully integrate the mobile division into the overall Virgin Media business and step up sales of mobile services into its 4.7m cable TV customer base.
Virgin Media has put itself up for sale but has extended the timeframe for completing the deal.
By Nic Fildes
Published: 09 August 2007
© 2007 Independent News and Media Limited
Virgin Media lost 40,000 of its most valuable customers to arch-rival Sky over the past three months as the cable television provider felt the impact of its public spat with the satellite television provider.
Virgin Media lost 70,300 customers in the three months to the end of June and attributed the bulk of customer defections to the carriage fees dispute with Sky. The spat resulted in some of its rival's channels, most notably Sky One that shows the popular Lost and 24 series, being taken off the cable platform. The loss hit Virgin Media's average revenue per user as the bulk of the users that left as a result of the Sky dispute were high-spending "triple play" users that sourced broadband, telephony and TV services from the company.
Virgin also lost customers in the telephony market with nearly 57,000 fixed-line users defecting to other providers. Meanwhile Virgin Mobile's customer base fell 46,500 as it continued to focus on moving more of its low-spending pay-as-you-go users onto contracts. Over the three-month period, the company added over 45,000 broadband users, lower than the near 88,000 it put on in the three months to March.
Yet Virgin's management was in a bullish mood arguing that the impact of the Sky dispute has now been washed out of the system. Neil Burkett, the chief operating officer of Virgin Media, said he was "quietly confident" that the slide in customer numbers had ceased and that the disagreement with Sky had not damaged the Virgin brand. He said that the "storm of the second quarter" had blown over and that the vast majority of customer defections in both television and telephony had occurred early in the quarter.
Mr Burkett challenged a recent research report compiled by Enders Analysis that suggested the company's "quad-play" model - based on the assumption that consumers want to source broadband, television, fixed-line and mobile telecoms services from one supplier - was failing. He called the research "premature" and said: "It's going very well. The upside in the short-to-medium term is substantial." He expects Virgin Mobile's new management team, led by ex-3 marketing director Graeme Oxby, to fully integrate the mobile division into the overall Virgin Media business and step up sales of mobile services into its 4.7m cable TV customer base.
Virgin Media has put itself up for sale but has extended the timeframe for completing the deal.
By Nic Fildes
Published: 09 August 2007
© 2007 Independent News and Media Limited
