Earnings: Virgin Preps 50Mbps Cable Broadband, Mobile Dongles

Virgin Media (NSDQ: VMED) will begin offering 50Mbps broadband in the second half of the year and mobile broadband dongles in Q4. Virgin is late to the UK’s booming broadband dongle space but the offering comes after it struck an agreement with its MVNO backbone T-Mobile to reduce the wholesale rates it pays for voice and data, retroactive to January and April retrospectively. It will also lower mobile data tariffs accordingly.

Today’s earnings show Virgin’s Q2 income fell 0.4 percent year-on-year to £990.5 million. Broadband signups of 54,600 were much fewer than the previous quarter but 19 percent more than the same period last year. Those taking the fastest, 20Mbps package are up 82 percent year-on-year, so there seems plenty of demand for the 50Mbps offering. Trading on fibre’s faster speeds, broadband is still referred to as Virgin’s “premier product”.

BBC iPlayer got 10.5 million views in June, “this gives VOD a new impetus and helps establish on-demand as a genuinely mainstream TV service”. Some 48 percent of consumers (1.6 million) are now using Virgin’s VOD each month, with views per user up to 24 from 14 a year ago. Average views per month were 38 million in the quarter, up five percent on the previous quarter. And 60,700 new V+ subs brings the DVR penetration to 13 percent.

Mobile revenue fell slightly to £143.9 million due to another dip in pre-pay customers. Income from Virgin’s content-producing VMtv unit and Sit-Up auction TV network are up eight percent to £79.5 million but income from the UKTV JV with BBC Worldwide fell from £5.4 million last year to £5 million. Overall, qurterly net losses widened from £119 million a year ago to £447 million after writing off a £366 million impairment charge

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