Virgin Media takes £366m writedown on mobile

by Daniel Farey-Jones, Brand Republic 07-Aug-08, 08:41

LONDON - Virgin Media has reported a second quarter net loss of £447m after writing down the value of its Virgin Mobile business by £366.2m.

Having conducted an annual valuation of the mobile business, Virgin Media concluded the declining valuations of comparable mobile companies meant it needed to take the writedown.

The reduction is a setback to the 'quad-play' strategy that was the rationale for merging Virgin Mobile with cable operators NTL and Telewest in 2006 and creating the Virgin Media brand.

However, the company's triple-play model of selling cable TV, broadband and fixed line telephone together is proving popular with customers. The proportion of its customers adopting triple play is at 53.1% compared with 45.2% a year ago.

The company's second-quarter revenues were £990.5m, down 0.5% from a year ago, when it made a net loss of £119m.

It signed up 24,800 TV subscribers during the quarter as well as 54,600 subscribers to its cable broadband offering.

Neil Berkett, chief executive of Virgin Media, said: "These second quarter results represent another solid operational and financial performance as we continue to lay a strong foundation for future growth.

"We have enjoyed another quarter of low churn and our customers buying more products from us than ever before."