Cable group ntl is to rebrand its consumer division Virgin Media in the first quarter of 2007. Ntl chief executive Steve Burch announced the move, which follows the acquisition of Virgin Mobile in July for £962.4m, as he unveiled a widening loss in the third quarter of £96.1m compared with a loss of £52.1m a year ago.
Total revenues rose by £542m to $1.02bn due to the merger with Telewest, acquired last year for $6bn, and Virgin Mobile. Gross customer additions rose by 19%, the result of ntl's marketing campaign for triple and quadruple-play packages of digital TV, high speed internet access and telephony (fixed and mobile) priced at '3 for £30' or '4 for £40' a month.
But after disconnections are taken into account—55,000 customers had services cancelled after they failed to pay—ntl had a net loss of 37,300 subscribers in the quarter. The company said it had a "firm plan in place" to address its "historical churn issues".'
Under the Virgin Mobile deal—which left Virgin empire owner Sir Richard Branson a 10.5% shareholder in the converged communications provider—ntl won the right to use the Virgin brand under a 30-year licensing arrangement generating £8.5m per year for Branson. But Branson insisted the brand could only be used when he was convinced ntl had improved its customer services reputation.
"Virgin Media will shake up the market by bringing the Virgin traditions of value for money, brilliant customer service and innovation to the world of entertainment and communications," said Burch. "While work remains to be done between now and the rebrand, our decision to announce its name and logo today is a reflection of my confidence that we're well on the way to creating an organisation that can live up to this vision by consistently putting the consumer first."
The group ended the quarter with: 3.3m TV subscribers, of which 2.9m are on the digital network; 4.2m fixed telephone subscribers; 4.5m mobile subscribers; and 3m broadband subscribers. Of ntl's 4.9m subscribers (excluding Virgin Mobile), 75% take two or three services, and 39% take three. Average revenues per subscriber were £42.48, up from £41.28 a year ago.
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