MVNO grows its mobile contract base by 12% but declines in prepay and changes to mobile termination rates hit revenues
Mobile revenue for the year was £554.8 million, up £1.9 million from 2011. Virgin said this was relatively flat compared to 2011 as strong contract revenue growth was offset by prepay revenue decline and changes to mobile termination rates (MTRs). Virgin’s mobile revenue for Q4 was £143.1 million, an increase of £900,000 year-on-year and £6.3 million sequentially.
Contract service revenue increased 8.9 per cent to £399.8 million in 2012, while prepay service revenue declined by 18 per cent to £140.7 million. Virgin said the MTR change reduced the amount of inbound mobile revenue by around £24.1 million and that it would have increased by 4.5 per cent without this factor..
Contract service revenue in Q4 rose sequentially by 1.7 million to £102.3 million, while prepay service revenue for the quarter rose £1.7 million to stand at £34.9 million.
Virgin increased its contract base by 12 per cent to 1.7 million subscribers with the addition of 185,000 contract customers in 2012. However, this was down from the 313,100 additions made in 2011, and 38,000 in Q4 2012, a sharp fall from the 102.5 million subscribers added a year earlier.
The firm’s prepay base continues to fall as it lost 32,100 customers in Q4 – 31,400 less than it lost in the same period a year ago but eight million more than what it lost in the previous quarter. Virgin now has 1.33 million prepay customers, with its total mobile base standing at 3.04 million subscribers.
Mobile ARPU was £15.13 in Q4, up 41p sequentially but down 33p from the same three month period a year earlier.
At the end of the quarter, Virgin had around 834,600 cable customers with at least one Virgin Mobile contract, which is up 15 per cent year-on-year. These homes had around 1.2 million contract mobiles.
Solid financial performance
- * Revenue up 2.7% to £4,101m for the year; up 1.6% to £1,040m for the quarter
- * OCF(1)up 4.0% to £1,654m for the year; up 4.4% to £442m for the quarter
- * Operating income of £699m for the year; £209m for the quarter* FCF(2)down 4.9% to £473m for the year; down 1.4% to £138m for the quarter
- * Net cash provided by operating activities of £1,040m for the year; £232m for the quarter
- * Average number of shares in issue reduced 12% in the year with the repurchase of 21m shares
Multiple sources of high quality revenue growth
* Cable revenue up 3.0% for the year; up 3.8% in the quarter* Net cable customer additions of 88,700 in the year, 42,700 in the quarter* Cable ARPU up 2.1% to £48.87 in the quarter* On-going improvement of customer base mix in the quarter* TiVo customers increased 896,900 in the year, 187,300 in the quarter* Paying TV customers(3)increased 210,000 in the year, 59,900 in the quarter* Superfast broadband customers (30Mb and above) increased 1.5m in the year, 419,400 in the quarter* Business division revenue up 5.2% for the year; down 4.5% in the quarter
Neil Berkett, Chief Executive Officer of Virgin Media, said: ’2012 was a year of record cable customer growth, where mainstream demand for superfast broadband and TiVo has led to lower churn and a strong increase in new subscribers. Combined with growth in our business division, we have delivered solid financial progress.’
Note: The notes preceding the Appendices relating to non-GAAP financial measures and other matters and the Appendices to this earnings release are considered an integral part of the financial and operational information in this release. Financial and statistical information is as at and for the three months ended December 31, 2012, unless otherwise stated. Comparisons of financial and operating statistics are to the fourth quarter of 2011, unless otherwise stated. Where financial information is given for the year ended December 31, 2012, any comparisons are to the year ended December 31, 2011 unless otherwise stated.
Gareth Mead: +44 (0) 20 7909 3289
Conference call details
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Forward-looking statements Expand
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* The outcome of litigation which may arise in connection with the transaction;
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