Virgin Media 2007 Quarter 4 Results

Thursday, February 28th, 2008
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  • Significant improvement in customer and RGU growth
    “¢ 272,100 total RGU1 net additions (Q3-07: 186,700); best quarter since merger
    “¢ 24,400 on-net customer net additions (Q3-07: 13,000); best quarter since
    merger
    “¢ On-net churn declined to 1.4% (Q3-07: 1.7%); lowest since merger
    “¢ 111,200 total broadband net additions (Q3-07: 122,900)
    “¢ 52,300 total telephony net additions (Q3-07: 13,700); highest since Q2-042
    “¢ 61,100 TV net additions (Q3-07: 20,400); best quarter for seven years
    “¢ 47,500 contract mobile net additions (Q3-07: 29,700)
    “¢ On-net cable ARPU increased to £42.24 (Q3-07: £41.55)
  • Record triple-play penetration of 49.5% (Q3-07: 47.0%)
  • OCF of £321m (Q3-07: £342m included certain benefits)
  • Operating loss of £18m (Q3-07: £47m income included certain benefits)

LONDON, England — Virgin Media Inc. (NASDAQ: VMED) announces results for the quarter ended December 31, 2007.

Television

Total TV net additions were 61,100 in the quarter, up from 20,400 in the previous quarter. This represented the best quarter for at least seven years, based on pro forma combined operating statistics for periods prior to the cable merger. We believe this result was aided by the attractiveness of our VOD platform. 1.5 million of our TV customers are now using our VOD service on a monthly basis, representing a reach of 47%. Average views per user per month in the fourth quarter were 23 compared to 10 at the start of 2007. Average monthly views were 33 million in the quarter, up 45% on the previous quarter.

TV net additions were also positively affected by a record quarter for driving DVR penetration, partly due to a promotional reduction in DVR pricing. During the quarter, we added 72,200 V+ DVR subscribers to reach an installed base of 262,400. This represents a penetration level of just 8% of our digital subscribers and so the growth opportunity remains strong. In addition, based on our experience, DVR subscribers and VOD users are less likely to churn.

The mix of TV subscribers improved during the quarter, with growth in the percentage of subscribers on our top basic tier. We believe that this growth was positively affected by the addition of the Setanta Sports channels into our top basic tier during the third quarter. We also launched the Setanta Sports News channel to our entire digital TV base in November. This channel is a joint venture between Setanta and us.

In the first quarter of 2008, we have slightly altered some of our acquisition offers to emphasize our higher TV tiers and as a result, although TV net additions are expected to remain strong, we anticipate that they will be lower than in the fourth quarter.

             RESIDENTIAL CABLE OPERATIONS STATISTICS (excluding Off-net and Mobile)
                                      (data in 000's)

                                            Q4-07    Q3-07    Q2-07    Q1-07    Q4-06
Cable Revenue Generating Units (RGUs)
  Television                               3,478.1  3,417.0  3,396.6  3,390.0  3,353.9
    DTV                                    3,253.5  3,167.0  3,125.3  3,081.1  3,005.9