Broadband News
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Orange leaking subscribers, Virgin Media buoyed by results
30 Oct 2009 | 19.31 Europe/London
Internet service provider Orange, which operates a broadband business that used to be one of the UK's biggest, has just revealed its still losing subscribers at an alarming rate. Meanwhile, rival ISP Virgin Media has announced it's getting closer to the four million mark in terms of its customer base.
During the third quarter of 2009, Orange has seen its total number of fixed-line broadband subscribers continue to slide, this time from 954,000 to 899,000. That's despite the ISP doing its best over the past year or so to try and convince patrons the quality of both its service and its customer support is improving - and even upping its official "standard" bandwidth to 20Mbit/s at no extra cost (though it's too early to say whether that particular measure is having an impact, less than two weeks in). In fact, with Orange similarly extending its contract length for new customers to eighteen months its feasible potential sign-ups could be scared off. And this is the same business that saw halcyon days under the Wanadoo and Freeserve brands.
It's not all doom and gloom for the French firm: Orange has added more mobile customers in the past quarter than in any during the past three years. Not only that, it also says its 3G mobile broadband user base has grown by sixty-four per cent year-on-year; the total's now 4.717 million users. Such data services now account for a quarter of its £1.14 billion revenue. However, overall takings from the UK were still down by over fifteen percent - mostly due to "the unfavourable impact of the pound sterling exchange rate."
In terms of fixed-line broadband, ironically the future looks brighter at Virgin Media. While it only added 5,100 customers during the second quarter of the year, for Q3 it's reporting a net addition (no pun intended) of 39,000. Of course, that figure is still below the number it managed to haul in during the same period last year: 68,700.
Virgin Media says 2.7 million of its subscribers are now able to receive "up to" 10Mbit/s broadband, which is up by over a hundred and fifty per cent year-on-year. That's partly due to migration, with 834,000 of its customers being upgraded from a 2Mbit/s service to "up to" 10Mbit/s lines so far and work continuing. Meanwhile, thirteen per cent - or 0.5 million - of the ISP's user base have now been hooked up with "up to" 20Mit/s connections. And almost sixty-per cent of Virgin Media customers have signed up for its triple-play of broadband, TV and phone services.
"Our triple-play penetration is at record levels and over 10% of our customers now take all four services from us," says CEO Neil Berkett, referring to Virgin Media's "quad-play" of broadband, TV, phone and mobile services. "Our focus remains on attracting high value customers, who buy more from us and stay with us longer. This strategy has led to ... strong consumer revenue growth." Take note, Orange: there may be better ways of keeping customers other than extending contract lengths.
With talk over the past couple of months of "green shoots of recovery" and Britain nearing the end of recession - notably, the United States announced this week that it's officially back to economic growth - it is possible that Virgin Media and even Orange will see stronger performance as ISPs in the final quarter of the year. However, even then there's no guarantee that people will start spending more on broadband. "It is difficult to try and gauge overall consumer demand and economic recovery from a business like ours because we are a subscription business and people are staying at home more and spending money in different ways," as Berkett told The Guardian. "They aren't spending on the high street as much, or in restaurants. It is difficult to gauge yet whether there is a recovery or not."
During the third quarter of 2009, Orange has seen its total number of fixed-line broadband subscribers continue to slide, this time from 954,000 to 899,000. That's despite the ISP doing its best over the past year or so to try and convince patrons the quality of both its service and its customer support is improving - and even upping its official "standard" bandwidth to 20Mbit/s at no extra cost (though it's too early to say whether that particular measure is having an impact, less than two weeks in). In fact, with Orange similarly extending its contract length for new customers to eighteen months its feasible potential sign-ups could be scared off. And this is the same business that saw halcyon days under the Wanadoo and Freeserve brands.
Revenues from Home Communication Services declined 15.6% on a comparable basis to 180 million euros (down 25.5% on an historical basis) due to the 12.2% decrease in the ADSL broadband customer base ... In addition, narrowband Internet revenues decreased as the number of narrowband Internet customers (69,000 at 30 September 2009), more than halved in one year.
(Source: Orange media statement)
It's not all doom and gloom for the French firm: Orange has added more mobile customers in the past quarter than in any during the past three years. Not only that, it also says its 3G mobile broadband user base has grown by sixty-four per cent year-on-year; the total's now 4.717 million users. Such data services now account for a quarter of its £1.14 billion revenue. However, overall takings from the UK were still down by over fifteen percent - mostly due to "the unfavourable impact of the pound sterling exchange rate."
In terms of fixed-line broadband, ironically the future looks brighter at Virgin Media. While it only added 5,100 customers during the second quarter of the year, for Q3 it's reporting a net addition (no pun intended) of 39,000. Of course, that figure is still below the number it managed to haul in during the same period last year: 68,700.
Virgin Media says 2.7 million of its subscribers are now able to receive "up to" 10Mbit/s broadband, which is up by over a hundred and fifty per cent year-on-year. That's partly due to migration, with 834,000 of its customers being upgraded from a 2Mbit/s service to "up to" 10Mbit/s lines so far and work continuing. Meanwhile, thirteen per cent - or 0.5 million - of the ISP's user base have now been hooked up with "up to" 20Mit/s connections. And almost sixty-per cent of Virgin Media customers have signed up for its triple-play of broadband, TV and phone services.
"Our triple-play penetration is at record levels and over 10% of our customers now take all four services from us," says CEO Neil Berkett, referring to Virgin Media's "quad-play" of broadband, TV, phone and mobile services. "Our focus remains on attracting high value customers, who buy more from us and stay with us longer. This strategy has led to ... strong consumer revenue growth." Take note, Orange: there may be better ways of keeping customers other than extending contract lengths.
With talk over the past couple of months of "green shoots of recovery" and Britain nearing the end of recession - notably, the United States announced this week that it's officially back to economic growth - it is possible that Virgin Media and even Orange will see stronger performance as ISPs in the final quarter of the year. However, even then there's no guarantee that people will start spending more on broadband. "It is difficult to try and gauge overall consumer demand and economic recovery from a business like ours because we are a subscription business and people are staying at home more and spending money in different ways," as Berkett told The Guardian. "They aren't spending on the high street as much, or in restaurants. It is difficult to gauge yet whether there is a recovery or not."