Virgin Media powering Liberty Global as overall residential cable revenues dip

Strong growth from the UK’s Virgin Media has powered Liberty Global Q3 performance, while overall the cable giant saw residential cable revenue fall and mobile and B2B revenue rise.

Virgin Media delivered revenue-generating unit additions of 105,000 in the third quarter, with growth from existing and new build areas being driven by its triple-play offers. Triple-play penetration improved to 63.4% in the third quarter. The UK outfit turned 39,000 broadband RGU additions, with 77% of broadband customers now taking over 100Mbps. Virgin Media said that Q3 video additions of 12,000 were hit by a modest increase in churn after UKTV removed its channels from the platform in July, before returning in August. Virgin Media increased its fixed telephony base by 54,000, boosted by the rollout of its IP voice service.

Some two million UK TV customers now take Virgin’s V6 advanced set-top box, while 68% of broadband customers have an advanced Hub 3 gateway.

Overall, Liberty added 28,100 net new RGUs in the quarter, down 51% on the comparable period last year. The company lost 36,700 video customers, a greater rate of loss than last year, with broadband additions of 24,000 down on the 62,700 added in Q3 2017. Voice additions were up, however, to 40,800, helped by the UK.

Liberty Global CEO, Mike Fries

Belgium and Switzerland were responsible for the RGU losses. In Belgium, Liberty’s RGU total declined by 52,900, while in Switzerland, the total was down by 41,500.

Overall the company posted revenue of US$3 billion, up 1.9%. However, residential cable revenue declined by 0.7% to US$2 billion, with mobile and B2B revenue making up the shortfall. Q3 operating income was down 1% to US$208.6 million.

CEO Mike Fries said that the “continued operating and financial momentum” had fuelled the company’s growth in the quarter, and said that Belgian unit Telenet, in which Liberty has a majority stake, had delivered “mixed results”, with organic cashflow growth driven by synergies.

Fries said that “the Swiss market remains challenging” but highlighted “a number of initiatives that we believe will improve performance”, including a revamped video offering, a refreshed MySports programming line-up, the launch of 1Gbps broadband an a new and improved mobile MVNO offering.

Switzerland will be the first market to see the launch of Liberty’s Horizon 4 TV product, the latest version of its advanced TV service.

Fries said that Liberty’s deal to sell its German and some CEE operations to Vodafone “remains on track” and is expected to close mid-next year, despite news that Germany’s Bundeskartellamt is requesting the EC to refer the deal so that it can launch a probe of the agreement.