Virgin Media sees small drop in business sales, and loses 18,000 broadband users

Cable telecoms supplier Virgin Media has reported a small drop in business revenue for its second quarter, while the firm also revealed it has lost 18,000 broadband customers since the same period last year.

The group announced that overall revenue was up 2.2% to £986m year on year, while net income of £98.2m was up from a loss of £59.9m in the same period last year.

Revenue from the business division, which supplies telecoms services to corporations and government, was down 1% to £151.2m, a fall the firm attributed to lower voice and data wholesale revenue, even though retail data sales increased by 9% to £68.7m.

Virgin Media Business highlighted recent successes in winning contracts with Cambridgeshire County Council and Westminster City Council that could eventually be worth over £200m, and its position as one of the chosen suppliers for Public Services Network (PSN) deals through a Cabinet Office framework agreement. Virgin says its fibre-optic cable network passes about 85% of all UK businesses.

"We're continuing to see strong growth in the public sector as we remain at the heart of the PSN initiative," said Mark Heraghty, managing director of Virgin Media Business.

"A mixture of cloud, big data, overloaded mobile networks and the increasing use of video is driving the demand for fast, secure and robust connectivity. As we continue to use our unique network asset as a platform for innovation, we're able to deliver game-changing technologies that address these challenges and much more. The commercial opportunities that are out there all represent pillars for significant growth both during the remainder of this year and into 2012."

But the company's broadband user base declined in the second quarter, with 18,100 net disconnections - the difference between new subscribers and those who were lost - 12,600 of which were from cable customers.

However, Virgin Media pointed to a growing proportion of broadband users signing up to higher-speed services, with half of all new subscribers opting for 30Mbps or above. Nearly one million of the firm's four million cable broadband users have a minimum 20Mbps service, with the volumes of monthly data downloads growing by 25% in the last six months.

Virgin plans to roll out 100Mbps broadband across its entire network by mid-2012, with the service already available to six million homes. Last week, the company launched a trial of 1.5Gbps broadband in the "Silicon Roundabout" area of London.