Virgin Media posts first quarter loss

Virgin Media, the UK's second-largest pay-television operator, posted a quarterly loss of £15.3m after subscribers defected to Sky and the company lost telephone customers.

Karen Darby, founder of price comparison service SimplySwitch.com comments: “Despite spending £25 million on a high-profile marketing campaign, Virgin Media hasn’t got off to a flying start. While Virgin did well in adding 87,900 broadband subscribers, its core TV business has suffered following its dispute with Sky.

“Over the coming months, Virgin Media will try to attract customers with its bundled packages, some of which are highly competitive. Virgin’s bundle deals have already proven popular and, unlike Sky, Virgin is able to offer a mobile phone element into the package.

“Many people still feel uncomfortable signing up their TV, telephone, broadband and mobile phone ‘wholesale’ to just one supplier. However, if a customer will make good use of all the elements on offer, choosing a bundle can be a good way of saving money.

“However, while Virgin Media’s packages offer good value, some individual products are actually quite expensive. Virgin’s ‘XL’ 10Mb broadband, for instance, costs £37 per month. This is £17 more than TalkTalk’s 8Mb deal, which includes line rental and free phone calls. Customers should also remember that it’s more difficult to switch providers once they’ve signed up to cable.

“Competition is hotting up in the TV bundle market. Not only is Virgin Media in fierce competition with Sky, but new offerings such as Tiscali’s ‘TV on-demand’ service and BT Vision have started to appear. Competition is great for the consumer, and should help drive prices down, but it may prove less popular with Virgin Media’s accountants.”