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Speed-hungry customers push Virgin into profit

broadband

By Stewart Mitchell

Posted on 8 Feb 2012 at 11:19

A surge in superfast broadband customers and high demand for its TiVo service have driven Virgin Media to its first-ever profits, the company announced in its results for 2011.

The five-year-old ISP said it had attracted 579,000 new customers to its high speed services (more than 30Mbits/sec) over the year, which helped push it towards a full-year net income of £75.9m.

Overall, the company signed 30,000 net new customers to its cable internet products, suggesting a large amount of switching between services.

The profit might have been a tiny percentage of Virgin's £4bn revenue, but the company said the results were the reward for a strategy of targeting higher-spending consumers with faster services.

“Our strategy of focusing on customers who want more from the digital world is paying off,” said Neil Berkett, Virgin Media's CEO.

As consumers spend longer online and connect multiple devices they are making use of the greater bandwidth that faster speeds provide

“With the number of TiVo customers doubling in the final quarter of the year, our new TiVo service is attracting both new and existing customers," said Berkett, saying the company now has 435,000 TiVo customers. "Demand for better broadband also continues to grow fast, with around half of new customers choosing superfast speeds.”

The switch to faster services is significant because of the additional revenue created, with the XXL 50Mbits/sec tariff priced at £25.50 compared with £14.50 for the 10Mbits/sec connection.

According to Virgin, half of new customers in the last quarter of 2011 signed-up for broadband packages of 30Mbits/sec or more, with superfast customers up by 133,000 in the quarter, and 579,000 for the year.

Virgin said nearly 1.2m customers subscribed to tiers of 20Mbits/sec or above, “which represents over 28% of our cable broadband base”.

The company claimed 700,000 subscribers on 30Mbit/sec or above, with 200,000 customers on the 50Mbits/sec or 100Mbits/sec tiers.

“As consumers spend longer online and connect multiple devices, often concurrently with others in the household, they are making use of the greater bandwidth that faster speeds provide,” the company said.

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User comments

Network Coverage

That certainly explains the reasons why Virgin seems to be pouring more money into increasing the speed of its network instead of overall coverage.

I suppose I can understand the reasons why it the return on investment is higher, but it is still annoying seeing Virgin advertise its 50Mbps service when I am stuck on a poor ADSL connection many miles away from the nearest exchange.

By mystic_dan on 8 Feb 2012

Upload speed

Dear Virgin, if you want to concentrate on premium customers then please provide premium service. Your upload speed and traffic management policy is just pathetic. I've got 10 Mbits/s service and it's enough for my needs but should I

By jasonK on 8 Feb 2012

Virgin are stingy when it comes to upload speeds

Just the bare minimum they can technically get away with.

Throttling seems excessive as well, speeds seem to fall to below what I used to get on a 56k connection.

By Lacrobat on 8 Feb 2012

Worst ISP I have had yet

I have had...
BT, Nildram, Bulldog, Zen, Sky, Be.
VM are by far the worst. Poor latency, packet loss, stupid amounts of throttling. So lets hope they invest in a decent network.

By drummerbod on 8 Feb 2012

Upload speed

... how should I use online backup on 750 kbits/s upload speed? And why I can't watch IPlayer HD or netflix for few hours before being throttled to 2,5 Mbits/s?

Sorry chaps but I'm going to spend £100 more per year for BT Infinity and much better o

By jasonK on 8 Feb 2012

Upload speed

... how should I use online backup on 750 kbits/s upload speed? And why I can't watch IPlayer HD or netflix for few hours before being throttled to 2,5 Mbits/s?

By jasonK on 8 Feb 2012

pc pro

Sort editing out. I look like a mug now!

By jasonK on 8 Feb 2012

bad quality

This explains why i'm getting poor pings, packet loss averages about 11% in peak times, they have oversold down my way, and the switch cannot handle it. Give them credit though, they have reduced my bill though until they sort it out

By Glass_Spider on 8 Feb 2012

So poor for on line gaming

I have been with VM for almost a year and they are truly shocking, poor latency high picks and lag you can drive a buss through. I still have access too a 3.5mbit SKY broadband which totally out performs VIRGIN for online gaming, explain that Mr Branson.
I think I shall be voting with my money as there customer support seem unable or un willing to help.
My advice don't even bother

By stevenproc on 8 Feb 2012

Best ISP I've ever had.

I've been a very happy Virgin Media customer for the last year, having had BT (flakey, slow, capped) and Sky (slow) before that. VM are upfront about their traffic management policy; if you want fast, reliable uncapped broadband then stick your hands in your pockets and pay for it; I'm on the 50Mb service and would have happily paid extra for 100Mb when it becomes available in my area, but it turns out I'll be getting the upgrade (and then some) at no additional cost. VM will have to really drop the ball to lose me as a customer…

By petermillard1 on 8 Feb 2012

Downgrade and save £s

When the new speed and the new charges arrive, downgrade one category and save yourself some money

By jeremyiwhite on 8 Feb 2012

I've been with VM for over 12 years...nuff said!

By Jaberwocky on 8 Feb 2012

Excellent Service

I have been a Virgin Media cable customer for years, since NTL days. Overall I would rate the service very highly.
.
As for their web site: hard to find stuff. And their telephone support: sometimes not very knowledgeable. But I doubt that others are any better.
.
I use Dropbox, which runs fine, despite the limited upload speeds.

By fogtax on 9 Feb 2012

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