British cable operator Virgin Media lost twice as many customers as expected in the second quarter but pushed their average spend to a record high, keeping revenues flat and in line with market expectations.
Virgin, which competes with pay-TV company BSkyB and broadband providers including BT, said on Thursday it lost 27,000 customers in the quarter. Most were low-value buyers of commodity broadband and prepaid mobile services.
Average revenue per user rose to 43.27 pounds ($73.46) a month, thanks to Virgin's strong superfast broadband and video-on-demand services, up from 41.68 pounds a year ago and beating consensus of 42.51 pounds provided by the company.
Under Chief Executive Neil Berkett, Virgin Media has taken advantage of a cable network that passes through half of British homes to sell its broadband and video-on-demand offerings with mobile and TV services in combined packages.
We remain well positioned to meet the wider economic challenges and to continue to provide our customers with more reasons to choose Virgin Media, Berkett said. The growth outlook for the second half of the year remains strong.
A record 58 percent of customers are now taking three of Virgin's four services -- landline and mobile phone, broadband and TV -- up from 53 percent a year ago.
BSkyB said last week it had signed up subscribers at its fastest rate for five years, luring customers who want to stay at home during a recession with high-definition programs and Britain's strongest sports and movie offerings.
Virgin's second-quarter revenues were flat year-on-year at 936 million pounds, broadly in line with a consensus of 941 million pounds. Operating cash flow, which held steady at 334 million pounds, beat consensus of 323 million.
The company, which has recently issued $1.6 billion in high-yield bonds to pay outstanding loans -- helping restart Europe's junk-bond market -- said its long-term debt was 5.859 billion pounds as of June 30.
It has nearly 3 billion pounds of debt coming due in 2012.
Virgin said it was considering a secondary listing in London in addition to its New York listing to attract UK-based investors. This would not involve issuing any new equity capital, it said.
(Editing by Lin Noueihed)