Cable company Virgin Media has announced further losses, albeit less than last year, despite adding new customers. Its new focus on broadband seems to be paying off, making it the largest residential broadband provider in the United Kingdom. The company continues to claim that it offers fibre optic broadband, a disingenuous description that is not repeated in its regulatory announcements.
Neil Berkett, acting chief executive officer, said the fourth quarter results reflected the best operational performance since the merger of the cable company under the Virgin Media brand.
“We are achieving good results from our stated strategy of exploiting our superior network capability to drive broadband growth and deliver the next generation of personalized on-demand content, as well as focusing on reducing churn,” he said.
Virgin Media makes repeated claims that it offers fibre optic broadband, although as regular readers of informitv will recall, it is actually delivered to the home over an ordinary co-axial cable, rather like a television aerial.
The Advertising Standards Authority was successfully persuaded that this represented “a negligible proportion of the overall fibre-optic connection”.
Needless to say, the phrase ‘fibre-optic’ does not appear at all in the quarterly results reported by Virgin Media, which are subject to the more stringent standards of regulators such as the Securities and Exchange Commission.
Nevertheless, Virgin Media now has 3.4 million cable broadband subscribers and 0.3 million off-net broadband customers, which makes it the largest residential broadband provider in the UK.
Interestingly, for a provider that is promoting its light speed network, the peak downstream traffic for the former Telewest network was 43Gbps. That may sound impressive enough to put on a slide for investors, but informitv estimates it to be equivalent in traffic to a dialup modem for each connected home. If all 3.4 million homes were to consume 10Mbps concurrently it would amount to 34Tbps.
The cable company has 3.2 million digital television customers, up nearly 250,000 on the previous year. 1.5 million of them are now using video-on-demand, around 23 times a month, compared to 10 times a month at the beginning of the year. Over a quarter of a million of their customers now have a digital video recorder.
Virgin Media made a net loss of 463 million last year, compared to 534 million the previous year. The company may be turning around its operation, but it is still a long way from being profitable.