Subscribers dip at Virgin Media Ireland but revenue climbs

Virgin Media Ireland lost broadband and television subscribers in the three months to the end of June, but its revenue rose, according to the latest figures from parent company Liberty Global.

The cable giant now has 371,100 broadband subscribers, down 1,500 on the end of the previous quarter. Television customers continued to decline and now stand at 270,800, down 3,000.

Its 352,500 home telephone subscribers were 2,800 lower at the end of the quarter.

Virgin added 4,300 to its mobile subscriber base, however, and now has 64,200 customers. The company began offering mobile services in October 2015 under a mobile virtual network operator agreement with Three Ireland.

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Despite the loss of subscribers, Virgin Media Ireland’s revenue increased 7.1 per cent to £95.1 million (€105.8 million) in the second quarter compared to the same period in 2017.

Its half-year revenue of £191.2 million (€212.6 million) is up 9.3 per cent on the same period last year.

Among its cable customers, Virgin Media Ireland’s average revenue per user rose to €57.81, up from €55.04 in the same quarter in 2017.

Virgin is expected to introduce its latest set-top box, known as Eos after the Greek goddess of the dawn, in the Irish market in 2019.

The company owns TV3 Group, which will rebrand to Virgin Media Television at the end of August, with the channels TV3, 3e and Be3 renamed Virgin Media One, Two and Three respectively.

Liberty Global chief executive Mike Fries recently said the company had invested €10 million to €15 million in the broadcaster, a relatively "modest" sum but enough to deliver "a nice turnaround story" for the group.

Sport channel

At the end of August, the company will launch Virgin Media Sport, a channel that will carry exclusive content such as Uefa Champions League matches. It will be free for television subscribers and available through an app for €20 a month to non-subscribers.

In July, UKTV removed its channels - including Gold, Dave, W and Alibi - from the platform after it said the sum Virgin was offering for them was too low and represented a “drastic cut” on the previous carriage deal. Virgin added four channels owned by CBS Studios International and AMC Networks International to the Irish platform at around the same time.

Overall, the European cable company controlled by US billionaire John Malone reported a 3.3 per cent increase in operating cash flow from continuing operations to €1.12 billion, in line with analysts' estimates.

The latest figures strip out Germany, Austria, Hungary, Romania and the Czech Republic, although the sale of those businesses to Vodafone Group under a $22 billion deal struck in May still needs the approval of regulators. Net customer additions were 43,000 in the second quarter, fewer than the 58,000 projected from Liberty's consensus.

Liberty Global has made a series of investments in challenger start-ups in European telecom companies, while Virgin Media in the UK is in the midst of a £3 billion (€3.3 billion) broadband network expansion to challenge former monopoly BT Group.

Vodafone proceeds

Investors in the London-based cable company are awaiting details on how it will spend the proceeds of the Vodafone transaction beyond debt repayments and share buybacks.

It has previously been suggested that its acquisition of TV3 Group in 2015 might serve as a model for future forays into broadcasting.

The company also owns 50 per cent of UK content producer All3Media in a joint venture with US communications group Discovery, with All3Media's subsidiary Company Pictures one of the producers behind the forthcoming Virgin Media Television drama Blood starring Irish actor Adrian Dunbar.

Virgin Media’s operation in the Republic and the UK will equate to about half Liberty Global’s business following the sale of assets to Vodafone. “So clearly we are focused and committed to this part of the world,” Mr Fries said on a visit to Dublin last month.

The Liberty boss also said the company had a positive outlook on the Irish market “with or without Brexit”, but that it did not anticipate a hard Brexit. – Additional reporting: Bloomberg