Telewest, Britain's second largest cable operator, returned to net customer growth in the third quarter of 2003.

The announcement came as part of a good set of results for Telewest's consumer division, which saw the number of customers taking all three of Telewest's main services - telephony, broadband Internet and cable television - increase to 15% of the total customer base. 75% of cable television customers now take the more valuable digital service, and those factors combined helped push the company's average revenue per user to a record £43.93.

As has been the trend over previous quarters, broadband Internet was the service that drove much of the growth in Telewest's consumer division; at the end of the quarter, the company had 367,000 broadband subscribers. By November 5, this figure rose to 389,000 subscribers. The bulk of customers still use the 512kbps service, with 12,000 subscribers using the 1Mbit speed and 7,000 at 2Mbps.

The all-important churn figures stabilised during the quarter; overall, it now stands at 14.2%. Broadband churn spiked at 14.7% in the quarter, blamed mainly on virus activity and a drawn out upgrade to Blueyonder's email platform. It levelled out to 13.7% during September and October. Cable TV churn fell to 16.9%, while telephony churn rose slightly to 14.2%.

Strong growth in advertising helped Telewest's content division, Flextech, to post a 2% rise in revenues over the third quarter in 2002. Revenue from subscriptions also rose over the first three quarters of the year due to general growth in the UK's pay television sector.

Overall, Telewest posted turnover of £1.013bn, a slight increase on the same period last year; earnings before tax, interest, depreciation and amortisation rose 19% to £334m, while the net loss amounted to £327m, down 18% on the same period last year.

Telewest's managing director, Charles Burdick, said:

"As anticipated, we returned to modest customer growth across each of our consumer product lines, with new product propositions and increased and more efficient marketing combining with reduced churn. These trends have continued into October.

"Our bundled products are proving popular, and 15% of our customers now take the triple play of TV, telephony and broadband. Our ARPU, which remains the highest of any European cable company, has again risen to a record level. We also continue to be the broadband leaders in our franchise areas with an accelerating growth driven by innovative services, including wireless broadband and 2Mb speeds.

"Together with our focus on costs, this operational performance has delivered record EBITDA and EBITDA margin for the quarter before exceptionals and positive free cash flow for the year to date.

"Alongside our commercial and financial progress, we have announced agreement with our principal shareholders and bondholders on the terms of our proposed financial restructuring and are in discussions with our banks on the new term sheet for our continued bank finance.

"We believe our strategy of customer focus, cost control and broadband leadership across the strength of our franchises provides a good platform for future growth and increasing cash generation."