Virgin Media boosts broadband but drops mobile revenues

Telecoms giant Virgin Media shows a steady rise in revenues for the third quarter but admits to a slowdown in its mobile business

Virgin Media has announced sales of just under £1.03bn for the third quarter of 2012, despite issues in its mobile division.

The figure was a 2.8% rise compared to the £1bn it recorded in the same period last year, whilst profit rose dramatically to £124m, up from a  loss of £74m in the third quarter of 2011.

The company also signed up an extra 39,500 cable customers and increased its superfast broadband users by 452,900 to 1.8 million – representing 42% of its broadband customers.

Yet, its mobile division recorded a 3.1% fall over the three months down to £137m. Virgin Media blamed the decline on the regulatory changes to mobile termination rates, costing it £7m. However, there was also a 22% drop in prepay revenues to £34.5m, which the 5.5% rise in contract revenue couldn’t make up for.

Neil Berkett, CEO of Virgin Media, said the company had “delivered solid financial progress” and pointed to its cable and television divisions as signs of success.

He also gave a nod to the enterprise arm of the firm, Virgin Media Business, which posted a 9.5% boost in sales to £169m for the quarter and represented 44% of the whole group’s sales for the first nine months of the year.

The division is not only responsible for big public sector contracts, such as its involvement with PSN, but also is in charge of the London Underground Wi-Fi roll-out which happened in time for the Olympics this year.

"The business division has continued to be a key driver of group revenue growth and this is a direct result of continued success in the public sector as well as pushing connectivity boundaries in the mobile world,” said Mark Heraghty, managing director of Virgin Media Business.

“It’s been a busy and exciting third quarter and I'm looking to reporting a successful year where it becomes even more clear that Virgin Media Business is the leading challenger brand.”

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