MVNO grows its mobile contract base by 12 per cent but declines in prepay and changes to mobile termination rates hit revenues
Virgin Media saw its mobile division contribute to it posting a solid set of results for 2012 and the fourth quarter of the year,
Mobile revenue for the year was £554.8 million, up £1.9 million from 2011. Virgin said this was relatively flat compared to 2011 as strong contract revenue growth was offset by prepay revenue decline and changes to mobile termination rates (MTRs). Virgin’s mobile revenue for Q4 was £143.1 million, an increase of £900,000 year-on-year and £6.3 million sequentially.
Contract service revenue increased 8.9 per cent to £399.8 million in 2012, while prepay service revenue declined by 18 per cent to £140.7 million. Virgin said the MTR change reduced the amount of inbound mobile revenue by around £24.1 million and that it would have increased by 4.5 per cent without this factor..
Contract service revenue in Q4 rose sequentially by 1.7 million to £102.3 million, while prepay service revenue for the quarter rose £1.7 million to stand at £34.9 million.
Virgin increased its contract base by 12 per cent to 1.7 million subscribers with the addition of 185,000 contract customers in 2012. However, this was down from the 313,100 additions made in 2011, and 38,000 in Q4 2012, a sharp fall from the 102.5 million subscribers added a year earlier.
The firm’s prepay base continues to fall as it lost 32,100 customers in Q4 – 31,400 less than it lost in the same period a year ago but eight million more than what it lost in the previous quarter. Virgin now has 1.33 million prepay customers, with its total mobile base standing at 3.04 million subscribers.
Mobile ARPU was £15.13 in Q4, up 41p sequentially but down 33p from the same three month period a year earlier.
At the end of the quarter, Virgin had around 834,600 cable customers with at least one Virgin Mobile contract, which is up 15 per cent year-on-year. These homes had around 1.2 million contract mobiles.
Virgin said it estimated it has a further 202,500 cable households with at least one of its prepay phones, meaning total penetration of the cable base is around 21 per cent, which it said provides further significant growth opportunities to cross-sell to the remaining 79 per cent.
Quad-play penetration, where a household takes Virgin’s telephone, broadband, TiVo and at least one mobile service, increased to around 15.8 per cent of its residential cable customer base, compared to 14.5 per cent a year ago. It has around 774,600 quad-play customers, up 11 per cent year-on-year.
Virgin Media CEO Neil Berkett (pictured) said: “2012 was a year of record cable growth, where mainstream demand for superfast broadband and TiVo has led to lower churn and a strong increase in new subscribers. Combined with growth in our business division, we have delivered solid financial progress.”