Belfast Telegraph

Price hikes support Virgin Media revenues despite 73% slump in new subscriptions

The company said it added 7,700 net subscriptions in the fourth quarter, marking a 73% drop from 28,200 additions a year earlier.

Price rises at Virgin Media helped lift revenues in the fourth quarter, although the telecoms giant suffered a 73% drop in new subscriptions as it pared back a raft of customer promotions.

The group said a 1% price hike for UK customers in November helped raise average revenue per user in its cable division in the three months to December 31, which contributed to a 4.4% rise in total revenue to £1.29 billion.

Virgin Media – which was bought by Liberty Global in 2013 – also cheered an 8% year-on-year drop in the number of cancelled subscriptions over the period, and a fall in the rate of customers leaving the business to 15.2%.

However, it took a major hit in the number of new subscriptions, which accounts for multiple services potentially taken by individual customers.

The company said it added 7,700 net subscriptions in the fourth quarter, marking a 73% drop from 28,200 additions a year earlier.

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Stronger performance in new build areas was offset by lower growth across areas where it is more established, and the group said this was the result of a new “structured approach to promotions”, having been more focused on raising customer and subscription volumes a year earlier.

The biggest reduction came from new internet subscriptions which fell from 48,500 in the fourth quarter of 2016 to 25,000 in the final three months of 2017 – though Virgin Media said the “profile” of its broadband base continues to improve as more subscribers are opting for higher speeds.

Basic video subscriptions suffered a 1,800 loss compared to 1,000 new net subscriptions a year earlier, while the number of new enhanced video subscriptions rose by 2,100 compared to a loss of 2,800 during the same period in 2016.

For the whole of 2017, the company added around 336,000 subscriptions, marking a 34% rise year on year, while revenue for the full year jumped 2.1% to £4.96 billion.

Figures accounting for its mobile division showed that total net additions increased by 32,800 in the fourth quarter, having been partially offset by prepaid mobile losses.

Virgin Media said its “innovative” 36-month Freestyle contracts and 4G offers helped boost the number of non-prepaid mobile subscriptions, with 4G subscriptions now making up 55% of that customer base.

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