Virgin Media - Full Year And Fourth Quarter 2012 Results

We repurchased 20.5m shares during the year, reducing our average share count by 11.5%.

Improved cable revenue growth

Full year consumer cable revenue increased by 3.0% to £2.8bn driven by 2.2% cable ARPU growth and 1.8% growth in the customer base during the year. Consumer cable revenue growth for the quarter was 3.8%,

Cable customer net additions were 88,700 in the full year which is a record for Virgin Media and a significant improvement on the 5,500 added in 2011. Net additions for the quarter were 42,700 with gross additions increasing 2.8% while gross disconnections fell 11.7%, a year-on-year improvement for the fifth quarter in a row. This led to churn improving from 1.3% to 1.1%.

We added a net 112,700 triple-play customers in the year and 36,800 during the quarter, increasing triple-play penetration to 64.9% compared to 63.7% a year ago.

Strong demand for superfast broadband and TiVo

A year ago we introduced new product “Collections” which included superfast broadband, TiVo and HD TV as standard. These were created to meet increasingly widespread consumer demand for better connectivity and next generation entertainment by further differentiating our products from those of our competitors.

During 2012, the number of customers on superfast speeds (30Mb and above) increased by 1.5m, including 419,400 during the last quarter, taking the total to 2.176m or 51% of our broadband base. Total broadband net additions in the year were 169,300, with 62,700 in the quarter compared to 30,000 a year ago.

Demand for even faster speeds remains strong with around 41% of new broadband subscribers taking speeds of 60Mb or higher during Q4. Our programme to double the broadband speeds of over 4m customers is on track with 76% of our network upgraded for the new faster speeds.

At the same time, the recognized appeal of our TiVo service is driving pay TV growth. We added 896,900 more TiVo customers during 2012, including 187,300 in the fourth quarter to reach a total of 1.33m or 35% of our TV customer base. This uptake has helped to drive the overall number of paying TV customers, which increased by 210,000 in the year, including 59,900 in the final quarter.

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