Sky row blamed for 40,000 Virgin defections

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Virgin Media says the removal of Sky's basic channels in March prompted an estimated 40,000 cable TV subscribers to cancel their contracts. The quad-play provider—which earlier this week gave potential bidders in a looming auction for the company more time to put their financial plans together—lost 70,300 cable customers, and ended the second quarter of 2007 with 3.4m, of which 3.1m are on Virgin Media's digital network. That is up from 3.3m TV customers a year ago, and 2.8m digital subscribers.

Net cable TV subscribers rose by a better-than-expected 2,200 in Q2, down from a rise of 36,100 in Q1. The number of Virgin Media households taking its digital television recorder service, V+, rose by 53,000 to 167,000, while broadband customers increased by 51,000 to 3.5m.

"Total gross disconnections of 262,200, were up 31,000 compared to the previous quarter due mainly to the impact of Sky's removal of its basic channels," said Virgin Media. "We expect the churn impact from this issue to be largely contained within the second quarter. Without the impact of this issue, we estimate that churn would have been flat at 1.6%."

Commenting on the results, Virgin Media CEO Steve Burch said the company's TV business had shown "a resilient performance". "The new partnership with Setanta, the planned launch of sports and entertainment channels and our growing VOD platform makes us the superior pay-TV offering in the country," he added.

Lovelace Consulting  |  08.08.2007

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