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TMCNet: Bolt helps Virgin sprint ahead in superfast broadband race: Cable firm trebles number on top speeds in a year Ad campaign with runner is credited for success

[April 25, 2012]

Bolt helps Virgin sprint ahead in superfast broadband race: Cable firm trebles number on top speeds in a year Ad campaign with runner is credited for success

(Guardian (UK) Via Acquire Media NewsEdge) The race to win the superfast broadband market has stepped up a gear, with Virgin Media saying it has trebled the number of customers on its highest speeds in a year.

Sprinter Usain Bolt, who features in the current Virgin advertising campaign sporting a Richard Branson beard, was credited with injecting momentum into the drive to convince consumers to pay extra for speeds which many households were not aware they needed a year ago.

With internet television services such as iPlayer rising in popularity, the numbers signing up for packages of up to 100 megabits per second are ramping up, allowing the two companies able to offer them, BT Group and Virgin Media, to claim an edge over rival broadband suppliers.

The chief financial officer at Virgin, Eamonn O'Hare, said: "We've had a really busy start to the year, fast out of the blocks, and that's mostly down to our ad campaign." He said superfast broadband was now helping Virgin and BT "pull away" from Talk Talk and BSkyB, who do not own fibre networks.

On Wednesday Virgin declared first-quarter revenues of more than pounds 1bn for the first time, and now has 843,000 subscribers on speeds of between 30 and 100 megabits, having added 146,700 in the quarter. At the start of the year it announced a plan to double the speeds of all 4.1m broadband customers at no extra cost.

BT will report its March numbers next month, but Virgin's latest results trumped BT's Christmas period, during which 95,000 upgraded to its superfast product, BT Infinity. Virgin now has 843,000 customers on higher speeds, compared with 400,000 at BT.

In the three months to 31 March, Virgin beat forecasts on customers and sales, with revenue rising 2.4% to pounds 1.006bn in the quarter. It added 21,200 customers to its network compared with the last quarter, the highest in two years. Analysts had forecast an average of 11,000.

The number was up 6,500 year on year, with Virgin's cable subscriber base now at 4.827 million. Over 45,000 cable broadband customers were added in the first three months of the year, the highest yet for a single quarter.

The company has increased its broadband customer total by 87,400 over the past 12 months to 4.15 million, suggesting a recession-defying demand for better internet connections. Citibank analyst Paul Sidney said the performance indicated "there is still strong broadband growth in the UK with Virgin Media typically taking the high-end customers".

The broadband boost was underpinned by increases for television, the Tivo digital video recorder and telephone services.

The additions were on Virgin's own cable network, while customer numbers on lines that it rents from BT continued to shrink in line with group strategy. Virgin Mobile contract subscribers increased 64,100 to 1.6 million.

Virgin Media Business, which sells telecoms to corporate clients, grew revenues by 7%, slower than last quarter's 14% growth.

Chief executive Neil Berkett has set a target of growing revenues from business customers - Virgin has just 4% of this market - faster than its consumer income over the coming years.

It is expected to face stiff competition from Vodafone, which this week set out its intentions of becoming a major player in the sector by agreeing to buy Cable & Wireless Worldwide for pounds 1bn.

"The opportunity for us in the enterprise sector is undiminished," said O'Hare. "Vodafone owning this asset isn't going to change the strategic landscape." Having reported its first annual profit last quarter - ending decades of losses for the British cable industry - with a modest pounds 76m taking, Virgin remained in the black with net profit rising year on year from pounds 4m to pounds 7m.

pounds 1bn Virgin media's first quarter revenues. The cable company now has 843,000 subscribers on speeds between 30 and 100 megabits Captions: Olympic gold medallist Usain Bolt wears a Richard Branson-style beard in Virgin Media's adverts for its superfast broadband (c) 2012 Guardian Newspapers Limited.

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