By Simon Zekaria
LONDON--Virgin Media said Friday it is investing billions of
dollars over the next five years to expand its super-fast broadband
Internet network as the U.K. cable operator reported a rise in
quarterly revenue.
The company, owned by U.S. cable and media giant Liberty Global
PLC, also said the network spend of GBP3 billion ($4.62 billion) --
which will increase the reach of its fiber-optic cable by 4 million
homes and businesses to over 16 million -- will create 6,000
jobs.
The group called it the single largest investment in broadband
digital infrastructure in the country for more than a decade, which
will benefit the U.K. economy by GBP8 billion.
Separately, the operator said revenue in the three months to the
end of December 2014 rose 4% to GBP1.07 billion , boosted by growth
in cable subscriptions. Full-year revenue was up 3% to GBP4.21
billion.
Virgin Media said it now has 5 million cable customers, adding
77,000 in the year, excluding acquisition and disposals, which is
an increase of 19,000 on the year-earlier period, it said.
Two-thirds of its customers take so-called triple-play services of
fixed-telephony, broadband Internet and television. "Churn"-or the
rate at which customers leave a service-fell to 14.6% in the fourth
quarter from 15.3% in the same period a year earlier.
Virgin Media, along with competitors BT Group PLC (BT.A.LN), Sky
PLC (SKY.LN) and TalkTalk Telecom Group PLC (TALK.LN), is in a race
to win subscribers through bundled offers of telephony, broadband
and TV in the U.K.'s rapidly-converging telecom and media
markets.
All the companies either offer or are set to offer so-called
quadruple play services of fixed-telephony, mobile telephony,
broadband Internet and TV. BT is also rolling out fiber-optic cable
and is investing billions of dollars into content for its sports TV
channels to win broadband customers.
Sky is 39%-owned by 21st Century Fox, which until June 2013 was
part of the same company as The Wall Street Journal parent News
Corp (NWS.AU).
At 0950 GMT, BT, Sky and TalkTalk shares were down 2.2%, 0.8%
and 1.3%, respectively, at 440 pence, 920 pence and 319.4
pence.
"We wouldn't be surprised to see the whole U.K. triple [and]
quad-play space come under pressure on this news," said Citi
analyst Thomas Singlehurst.
Write to Simon Zekaria at simon.zekaria@wsj.com
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