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Virgin Media Q1 revenue tops £1bn on broadband, TiVo growth

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Virgin Media ad campaign featuring Usain Bolt
Virgin Media's revenue topped £1 billion for the first time in the opening quarter of the year as major marketing campaigns powered growth of broadband and TiVo subscribers.

The cable operator added 21,200 net new customers in the first three months of 2012, outperforming analyst expectations of 11,000.

Buoyed by a marketing campaign featuring sprinter Usain Bolt, Virgin Media's superfast broadband service (30Mbps and above) saw customers increase by 146,700 in the quarter, while the total broadband base hit 4.148m.

Virgin Media has now completed its roll out of 100Mbps broadband, and is in the process of upgrading around 4m existing customers by doubling their broadband speeds.

Despite a controversial price hike in February, Virgin welcomed 242,000 customers to its TiVo converged digital TV service in the three months to March 31, and now 677,100 subscribers are signed up to TiVo. Virgin's overall pay-TV base increased by 50,600 customers to 3.775m.

Just after the quarter ended, Virgin introduced a new product called Collections, which makes TiVo standard across all the company's product bundles.

Revenue at the cable operator was up 2.4% to £1.006bn, the first time the company has ever reached £1bn in a first quarter period. Operating profit was up 18% to £131m, while net profit almost doubled to £7m from £4m.

Average revenue per user (ARPU), a key metric for analysts, was up slightly by 1.7% to £46.95.

Virgin Media chief executive Neil Berkett said that the firm had made "steady progress" in the first quarter against its targets.

"Demand for superfast broadband and TiVo, the UK's first mass-market connected TV service, continued to gather momentum. We once again demonstrated the unique power of our network by starting to double the broadband speeds of over four million customers," he said.

"We have seen an increase in ARPU and greater customer loyalty with our best subscriber retention for two years and this has reinforced our confidence that people increasingly appreciate the value of a genuinely next-generation digital experience."

Looking further ahead, Berkett added: "Over the remainder of 2012, we expect continued steady progress across the company which, combined with the underlying resilience of our business model, will translate into strong cash flow and shareholder returns."

> David Tennant, Virgin Media ad pulled after BBC complaint

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