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Virgin Media yesterday said that it has lost nearly 50,000 customers this year and expects to lose more as its high-profile row with BSkyB begins to have an impact.
Despite spending £25 million on rebranding, the cable group suffered a 46,900 fall in customers to 4.8 million in the first quarter.
Steve Burch, chief executive of Virgin Media, cautioned that there would be further falls in customer numbers over the next quarter as the result of the row with BSkyB, its pay-TV rival, which is 39.1 per cent owned by News Corporation, parent company of The Times.
Sky and Virgin are embroiled in a dispute over how much the cable group should pay to carry Sky’s basic channels, with each side blaming the other for a breakdown in negotiations. Sky’s basic channels have been removed from the Virgin platform. Virgin has taken legal action in the High Court, accusing Sky of anticompetitive behaviour.
Mr Burch said: “Any company that takes channels off the air is going to take a hit, but if you look at the cost of what they were asking and the competitive issues, it’s really the only decision we could make.
“We’re not being cavalier about it, but we’re comfortable that we made the right decision for the business and we believe that in the long term we made the right decision for the customer.”
The warning about a further slide in customers, combined with the poor first-quarter subscriber figures, sent Virgin Media’s shares on Nasdaq down by as much as 5 per cent in early trading.
One analyst, who declined to be named, said yesterday that continued poor subscriber figures could make a fresh approach from private equity players likely. An approach now “made a lot of sense”, he said.
NTL, the cable group that merged with Sir Richard Branson’s Virgin Mobile to form Virgin Media, was twice targeted by private equity players. The merger was supposed to transform the group, which was plagued by a reputation for poor customer service, into a major media and communications player.
The new entity was marketed as Britain’s first “quadruple play” provider of broadband, television, phone and mobile services.
But in the quarter to the end of March, Virgin swung to an operating loss of £15.3 million.
The group suffered a haemorrhaging of telephony customers. Mr Burch blamed continued pressure from the “free” offerings launched by Carphone Warehouse and BskyB. He hopes refreshed tariffs and “bundles” will help the company to recover.
He conceded that Virgin’s heavy focus on broadband and television over the past year had led it to take its “eye off the ball” in the fixed-line telephony market.
In contrast, Sky’s recent success in winning a higher than expected number of new subscribers was in part attributed to its spat with Virgin.
Virgin insisted that the rest of its television content would make it a key player in the sector, even without Sky’s offering.
Karen Darby, founder of the price comparison service SimplySwitch.com, said: “Despite spending £25 million on a high-profile marketing campaign, Virgin Media hasn’t got off to a flying start.”
Mr Burch said that the decision not to agree to the cost and contract terms of renewal for the Sky basic channels would be better for the business in the long run.
Virgin numbers
3.39m total TV subscribers
87,900 broadband subscribers added in first quarter
63,400 first-quarter fall in telephone customers
46,900 net loss of subscribers
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The serivice was great when it was Telewest/Blueyonder. Since the merger and rebranding into Virgin Media I think the service is slowly detoriating.
My biggest gripe now is the capping of connection speeds between the times of 4pm to 12am. I'm only on 2mb anyway and they are capping it if you download over 340mb. Anyone who has understanding of current internet trends would know that 340mb is a very low these days. I use my connection for my xbox 360 and Playstation 3, as well as my PC. The size of files is ever increasing in size. A couple of HD trailers would reach the 340mb limti easily and 1 game demo can be as large as 1 gig in size these days. Not to mention the introduction of internet tv streaming that is broadcasting at even higher quality due faster download speeds. Using the internet for media and entertainment is severely limited now for me. I'm getting 1mb most of the time as I will reach the limit of 340mb pretty much everyday, easily.
kieran, birmingham,
been trying to cancell bb with virgin but cannot get through new customer lines answer at once though but will not help as staff are dumb with no training.
will contact ofcom in the morning and also visa as virgin should not be allowed access to my card - in fact have realised that only way to cancell is to cancell my visa card to stop them taking money. new talk talk bb to commence in 3 weeks.
contract says only way to cancell virgin bb is by phone but cannot get through - illegal and unethical.
avoid virgin like the plague.
mungo, manchester, lancs
Been with virgin media for years now. are should i sat telewest, the service i have has allways been great. 10mb bbi, tv, and phoneline. Never had any problems wiuth any, and great value for money. Welldone Virgin!
Chris Wood, Sheffield,
I have subscribed for 4Mbit cable internet. I get internet with speed of an Dial-up Internet! Useless crap!
istvan, Norwich, England
I pay for a 20MB Broadband Service form NTL / Virgin Media, I have had this service when the company was NTL - I NEVER had a problem, as soon as Virgin took over my speed as dropped to about 1 MB (at best) and my Virgin TV freezes and the menus dont work - its unwatchable. So for nearly £40 a month I have a broadband service that is worse than dial-up used to be - and a TV service I cannot watch. I will be cancelling my service as soon as I get to speak to an ENGLISH speaking (and understanding) member of their incompetent staff. Thanks Virgin - FOR NOTHING
Neil Marshall, Colchester, Essex
I have been waiting since 3/4/07 for the contractors to dig a hole in the road so that the cable can be repaired. I have countless phone calls, waited hours on the phone and i still no one has called back. for the last week i have tried to cancel but gave up sitting on the end of the phone. I don't have an email address because i dont have a service.
c tollafield, reading,
I have been on hold trying (again) to cancel my Virgin Media account for 30 mins and counting now. The broadband service was fine, but their customer service is appalling. All I wanted to do initally was transfer my account to a new home. After x2 calls, 40 mins, and x6 staff none of which could help, I have given up! I'd rather pay the £50 cancellation fee to be rid of them...
35mins...
Tom, London, UK
I would like to know why my channels have been reduced again and yet the price has NOT -in fact it's increased by a few pounds! You have lost thousands of customers over recent months yet appear to be doing nothing in stopping more leaving!
Tracey Thomson, Edinburgh,
I have been a NTL customer for many years having the basic cable line just to watch TV but since the takeover I have lost sky one and instead of being charged £2 per month it has now increased to £4 per month and in return I am getting a crappy service as well as picture quality, you email them and get no response. I am too going to give them the elbow
Rose Thornton, Milton Keynes, England
Have been an NTL/Virgin Media customer for many years now and don't have any desire to change. Yes on odd occasions getting through to speak to someone took a long time but when needed and engineer arrived at the agreed time and always fixed the problem.
The broadband from Virgin is far superior to any other provider I have tried, the 10Mb service is actually 10Mb's and soon to be 20Mb - hooray! I've recently setup Sky's pathetic broadband offering for a friend, they need to reboot the modem almost on a daily basis for it to stay on the network and the speeds are so variable (slow to even slower) it drives you mad.
Glen, Guildford,
Having been a loyal customer for over a decade this is the worst service I have ever experienced!! Call centres that take 15mins (minimum) to get to speak to a human being, and when you get through to India sadly there is a clear language barrier.
I have found myself spending many nights trying to ring them to resolve problems & the simple answer - unplug your digital box & leave it for 1min before plugging it back in. Well I am now doing this at least three times a week & this is after having two engineers out wihtin a week who have done nothing to resume my service.
Virgin even had the audacity to bill me for a missed appointment that I hadnt even requested, yet when I was kept waiting & the engineer never turned up I get refused compensation for a lost days work - very one sided.
Virgin Media has a very long way to go to turn this around & keep clients from switching. I'm in the process of cancelling my contract as I type - theres only so much you can take after all.
Martin Young, Redhill, Surrey
Have been with Telewest NTL for many years and having experience other peoples broadband, the rebranded Virgin Media continues to provide a far superior service than many other offerings. Great TV package and signal (Teleport service is really useful). The new 4 for £30 Package is superb value, even my wife is struggling to use all the inclusive minutes on the mobile each month as we still get free calls on the home phone at weekends. We just need to remember which phone to use!!
Simon, Bristol, South Glos.
Virgin are terrible! We moved to Sky as soon as we lost LOST, and have never looked back. NTL was awful and Virgin are even worse. I am badgering my husband to cancel the telephony services also.
Mona, Nottingham, UK
NTL / Virgin whatever theyre calling themselves this week this company is an absolute joke with the worst customer service I have ever encountered.
Vick Kane, London,
I am with Virgin Media and have always been very happy with customer services. how ever as i would like to move to watch more Hi Def T.V i am thinking of switching to Sky as well.
I think a lot of lost customers might be due to the same reason.
people want HD and if need be will move to a broadcaster who can supply it.
Virgin media has 1 HD channel not enough and BBC might soon be pulling the plug on that one.
Come on Virgin Media lets get more HD channels
David, Peterborough, uk
It is not surprising that existing customers are leaving Virgin Media. Only the new customers are being offered the cheaper bundled deals. Subscription comparisons with Sky are based on the new prices and not existing prices.
K Mehra, Reading,
I'm one of the 50-odd thousand who jumped ship to Sky before the channels were withdrawn & I'm still angry about it. Several years with a perfectly good service from Telewest then Branson comes along and makes a total horlicks of the whole thing. First we knew that our contract would be with VM was when one of their invoices arrived, swiftly followed by the unprofessional & patronising "Hello you" advertising letter.
There then followed another letter saying that because we chose not to pay by Direct Debit we'd be charged a fiver every month. Then our our telephone & Broadband services started failing. The final straw was the eight phone-calls totalling seven hours trying to get through to a human-being in customer services without being cut off or transferred to an answering machine or wrong department.
Since I've left, I've since found out that they've introduced Traffic Management/Throttling. In short, they've ruined a good thing!
Rule Number 1: Look after your customers!
Len, London,
I recently left sky for Virgin and can say that the product I have from Virgin is better that that offered by sky, furthermore whenever there is a problem they have dealt with it promptly. Whilst the spat with Sky is frustrating, I feel that the value of sky one has been diminishing over the years as they repeat the same shows over and over. I never thought I would tire of the Simpsons but somehow sky managed it.
Dave, Walsall,
NTL has a history of not wanting to spend money and cut corners. They are now offering 20mbit broadband and they are traffic shaping between 4pm-12 and they claim on their homepage that its not because they do not want to upgrade the infrastructure it's because of abuse thats yet another NTL fib, why offer 20mbit if the system is already straining to cope?. They want to offer something faster than Sky broadband but do not want to upgrade the network to cope with this so they just use the traffic shaping instead of spending money, but they can waste 25 million on an advert campaign that has had no impact. Their adverts say "Unlimited unlike Sky" again they are lying because its now limited between 4pm-12am. NTL have always cut corners and will continute to do so at the expense of the customers.
Chris, Middlesbrough,
from the figures it looks like it's mainly phone customers who have left - in fact I know of 3 people that have signed up to Virgin Media in the last month including one who has left Sky - all figures are open to intepretation & it will be in the next quarter when we find out if the lose of the Sky Channels have had an impact
R Vance, London, UK
I am seriously considering moving away from NTL/Virgin Media - not because of the removal of tv channels, but because the service is so unreliable.
When talking to other subscribers I find I am not alone in encountering picture freezing, progamme information being unavailable or simple no tv at all!
I would like to add that since the merger the service has got worse!
They really are missing the point in blaming a fall in subscribers solely on a few missing channels!
David Smth, Harlow, Essex
It's not just telephone users. We are considering leaving and just getting freeview because to be honest, they are not offering us anything anymore that we can't get off freeview. It's shocking, we've even lost some other non-sky channels. Makes us mad!
Nick, Leamington,
As an existing customer, the glossy re-branding and promises of great things to come prompted me to try upgrading my services to include Broadband from Virgin's website. After filling in the forms, I received an over-familiar computer generated acknowledgement . Then nothing else. Sent another email chasing up a week later. It's been about 2 months now without further contact from Virgin.
Naz, Slough,
Since Virgin Media came along we have seen the loss of free local phone calls at evening and weekends, connection charge rise of 20% on telephone charges + a rise of 150% for Pay Point Payment charges now £5.00 in comparison to NTL's £2.00 charge, a popular method of payment with people on low incomes who do not wish to use Direct Debit payment.
Billy Wilson, Glasgow, Scotland
Virgin's insistance on Direct Debit, with non direct debit costing an extra £5 per month, and a swinging £10 penalty for accounts 1 day late, is driving customers away in droves.
These charges are at best sharp practise, and may prove illegal as they are totally out of proportion to any additional costs involved.
Just like the banks, when this practise is tested legally, it will damage Virgin's whole reputation greatlly.
Peter Mc Dowell, Preston,
Yes yes, adding at least some customer service would probably help them to reduce the losses.. It was exactly the reason I left.
paul, london,
I disagree with Jennifer. My experience of dealing with Virgin as been nothing but positive. I get my Internet, TV and phone with them and never had a problem.
Their service is also a lot cheaper than Sky!
Anton, Huddersfield,
The NTL /Virgin service instead of improving, has deteriorated!
TV services are inconsistent in quality of operations, as well as loosing content with the Sky channels.
The broadband service is not the cheapest, and they are now looking to groom this through profiling.
In addition, even if you you do not have a telephone and do not want the fixed line service, you have to still pay for it!
I'm not surprise about the decline in customer numbers, and unless they can convince existing customers as to how they intend to improve their services, it can only get worse.
The marketing of NTL as Virgin, and the Virgin customer experience has only made it worse...they will happily send you jaunty emails thanking you for you mail. All round service improvement is required.
Stephen_R, Belfast,
Would it not have been prudent to ask Virgin Media's customers wether or not they would be prepared to pay a small increase in subscriptions to retain all the base channels?
Dean Baldwin, Egham, United Kingdom
Rebranding and marketing is a waste of money if customer service is rubbish! The staff do not care - workmen ruin gardens, walls and paths when installing cables- fail to repair cabinets, miss appointments, overcharges, set top boxes that break, HD boxes at rip of charges of £125 a month! come on I'm no virgin but I know when I'm being screwed!
DFCoates, Brighton, Sussex UK
I switched from Sky to VM when the Sky One row blew up. I think we need competition in the market - isn't that what capitalism teaches us? As for the service, I actually prefer it to the Sky+ box I used to have. The big problem is the lack of HD content. The fact the box does HD as part of the standard package is great, but until there is more HD content that part isn't too important. I have no regrets about switching though and would recommend others to look at it.
John, Manchester,
Virgin Media is dreadful, their customer service is NIL and when they do answer they are just as thick as can be. I am told I do not have an account with them, strange they take my money and I receive all my internet services through them - not surprised they are loosing customers.
jennifer baker, surrey, surrey
As a long standing NTL customer, I was less than impressed with the childish comments that Virgin Media initially posted on their cable TV channels that used to be Sky channels. These initial comments made it sound like kids arguing in a playground! That's no way for big business to treat loyal customers who are experiencing a drop in services provided.This is the 21st Century customer service should be everything!
Keith, Stockton-on-Tees, UK