Entertainment

Virgin Media retains more customers following its row with Sky

Virgin Media said it was on course for a return to revenue growth after stemming a customer exodus following last year's spat with rival BSkyB.

The cable company has cut its monthly "churn rate" - the measure of customers leaving the group - to 1.2% during the first three months of 2008.

This rate peaked at 1.8% in the second quarter of last year following the row, which resulted in Sky pulling its basic channels in March last year.

Discounting customers who move house from cable to non-cable covered areas, this leaves the cable business with annual churn rate of around 10% - on a par with its rival.

Virgin Media also added 4,900 net new cable customers - its third successive quarter of customer growth despite the seasonally-quieter post-Christmas period.

The company said better billing systems and value for money had helped it retain more customers.

Although cable revenues were 3% down to £618.2 million year-on-year due to pricing competition, the decline slowed compared to previous quarters.

Chief executive Neil Berkett said the results reflected a solid performance, "better positioning ourselves for a return to revenue growth".

"In particular churn continued to decline, reflecting the emphasis that we have placed on this area," Mr Berkett added.

The group - formed from mergers involving Telewest, NTL and Virgin Mobile - has 4.8 million customers in total. Virgin founder Sir Richard Branson is the largest shareholder in the business, with a 10.5% stake.