Virgin’s mobile revenue up 1.2pc to £138.5m

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Virgin Media adds 64,100 contract mobile customers in the first three months of the year as cross-selling strategy continues to pay dividends

Virgin Media’s mobile revenue grew to £138.5 million in the first quarter of this year, up 1.2 per cent from the same three month period a year earlier.

The company said this increase was due to growth in contract service revenue, partially offset by the regulated change in Mobile Termination Rates (MTRs), and the decline in prepay service revenue.

Contract service revenue increased 14.9 per cent to £99.9 million, while prepay service revenue declined by 24.2 per cent to £35.2 million.

Virgin said MTR changes reduced the amount of inbound mobile revenue it received by around £6 million in the quarter. It added that it estimated mobile revenue would have increased by around six per cent when compared to the same quarter last year.

Virgin added 64,100 contract customers in the quarter. It’s base now stands at 1.6 million subscribers, up from 26 per cent a year ago.

However, Virgin lost 93,400 prepay customers in the quarter to take this base to 1.4 million, down 18 per cent compared to a year ago.

At the end of the quarter, Virgin had 764,800 cable households with at least one Virgin Mobile contract, up 33 per cent from a year ago. These homes had around 1.1 million contract mobiles.

Virgin said it also estimated it had a further 206,000 cable households with at least one of its prepay phones, meaning total mobile penetration of the cable base is around 20 per cent, which it added leaves a significant growth opportunity to cross-sell to the remaining 80 per cent.

Quad-play penetration, where a household takes all three cable products and at least one mobile phone service, increased to around 15 per cent compared to around 12.4 per cent a year ago. Virgin has around 723,000 quad-play customers, up 21 per cent year-on-year.

Mobile ARPU increased to £14.96 compared to £14.70 a year ago. However, it was a fall compared to the ARPU figure of £15.46 reported in the previous quarter.

Overall, the company’s revenue hit £1 billion, up 2.4 per cent from a year ago.

Virgin Media CEO Neil Berkett (pictured) said: “In the first quarter of 2012, we’ve made steady progress against our strategy. A growing base of mobile contract subscribers together with strong revenues in Virgin Media Business showed again we have multiple sources of revenue growth.

“Over the remainder of 2012, we expect continued steady progress across the company which, combined with the underlying resilience of our business model, will translate into strong cash flow and shareholder returns.”

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