Virgin Media earnings boosted by iPhone launch

Oliver Gill
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The Apple iPhone X was launched in November 2017 (Source: Getty)

Apple’s iPhone launch at the end of last year helped save the day for Virgin Media’s earnings, after broadband growth dipped in the last three months of 2017.

Virgin Media, the largest division of parent Liberty Global, saw growth in broadband and TV connections stagger during its final quarter.

Some 7,700 net new customer connections were made, compared with 28,200 in the final three months of 2016.

Britain’s third-largest broadband provider said the figures reflected “our structured approach to promotions”. Virgin Media dispensed with heavy discounting in the hope of maintaining earnings instead of chasing revenue growth.

Fourth quarter UK revenue rose 4.4 per cent on a rebased basis to $1.7bn. Annual sales were 2.1 per cent higher at $6.5bn.

Read more: Liberty Global reports soft revenue growth at Virgin Media

RBC Capital Markets analyst Jonathan Dann said: “The four per cent growth in UK revenues was driven by strong mobile handset sales (booked upfront) which alone contributed around one per cent of the group beat on revenues.”

Dann added the strong handset sales “related to iPhone launch” which flattered core cable revenues.

However, Jefferies analyst Ulrich Rathe said Liberty Global was “showing signs” of prioritising profit margin over revenue growth and highlighted an improved customer churn.

Liberty Global chief executive Mike Fries said: "Virgin Media, our largest operation, steadily improved throughout 2017.

“We successfully executed the price increase last November and continued rolling out cutting-edge products like our WiFi Connect and V6 set-top boxes, which we will continue to aggressively deploy in 2018.

“Early last year, we overhauled Project Lightning and subsequently reported progressively improved new build totals, including the delivery of nearly 160,000 premises in [the final three months] of 2017, a quarterly record.”

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