Virgin Media, the cable company, has held talks with BSkyB about restoring Sky channels to its service.

The company announced this morning that revenues are down slightly in the first quarter of 2008.

Neil Berkett, the chief executive of Virgin, said that there had been more conversations between the warring pay-TV operators in the last two or three months after new chief executives had been appointed at both companies.

BSkyB, which is 39.1 per cent owned by News International, the parent company of The Times, pulled its channels from Virgin’s platform last year after a public spat that followed the failure to agree terms for a deal.

Mr Berkett said: “It’s fair to say that with a change at the top of both organisations, there is a dialogue and there’s no sort of emotional legacy that would hold us back.”

Virgin’s results showed that it had gained almost 5,000 new customers overall — compared with losing nearly 47,000 over the same time last year. The slight decline in revenue was due to a decrease in the average amount users were paying for Virgin’s services.

Average revenue per user (ARPU) fell from £42.75 to £41.19 year on year as customers switched to cheaper packages.

The number of customers deserting Virgin fell as the churn rate declined to 1.2 per cent from 1.6 per cent last year. It is expected to increase again in the second quarter because of seasonal factors.

Mr Berkett said: “In particular, churn continued to decline, reflecting the emphasis that we have placed on this area. With our focus on reducing churn and stabilizing ARPU, we are well positioned for growth.”

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