“Low-end” customer losses no concern for Virgin Media

Lutz Schüler, CEO, Virgin Media

Virgin Media CEO Lutz Shüler has played down subscriber losses in the UK.

The exec, who replaced Tom Mockridge as the UK operator’s boss in June, was speaking during Liberty Global’s quarterly earnings call on Thursday.

When asked about the loss of subscribers, Shüler said that “we know these TV customers are the low-end customers.”

He said: “These are predominantly customers who used to buy our triple-play entry product.  So paying roughly, with time-limited discounts, £30. And then after 12 months, when they get off the time-limited discount, it’s a very high jump. And then they simply value the pure video product not as much then to pay more for it. And then you see high churn.”

Overall, Liberty Global lost 76,300 RGUs overall in the quarter, taking the total losses for the year-to-date to 80,400. 

Virgin Media’s RGU losses amounted to 53,000 for the quarter, which the company said was the result of focusing on higher-value TV bundles, with a 5,000 gain in broadband customers being offset by a 50,000 decline in video subs and a 9,000 decline in fixed voice subs.

Shüler went on to say that high-end packages “are very stable, and they provide higher margin.”

He added he doesn’t “see the world turning very much to an app world, a pick-and-choose world,” playing down the impact of cord-cutting on Virgin Media. He did however add that “we have to watch that carefully.” 

The CEO said: “Over a longer time period, we will see that trend. But these numbers are not really referring to that.”

Liberty Global CEO Mike Fries  also commented on Virgin’s recently announced deal with Vodafone to move its MVNO away from EE after 20 years. He said that access to 5G and financial terms were contributing factor: “[the deal], guarantees 5G access, which we were not getting in the other deal, and has much better economics.”