NTL revenues fall after contracts end

Cable operator NTL posted a 5% fall in fourth-quarter revenues today as it prepared to complete its merger with smaller rival Telewest.

NTL, which has also made a £900m (€1.3bn) indicative offer for Virgin Mobile, said turnover fell after it lost business contracts with AOL and Vodafone.

But the company slashed its annual losses as it increased its residential customer base and the number of people subscribing to its triple-play service of TV, telephone and internet.

Telewest’s fourth quarter results were also boosted by an increased up-take of triple-play.

The deal between NTL and Telewest is expected to be closed on Friday, but NTL refused to comment on a possible link-up with Virgin Mobile. It is thought that a takeover deal could be struck within the next two weeks.

Revenues at NTL fell from £512.3m (€752m) in the final three months of 2004 to £484.6m (€711m) million at the same stage of last year.

It dragged full-year revenues down 3% to £1.95bn (€2.8bn) despite NTL adding nearly 200,000 residential customers in 2005.

Business revenues were hit by the loss of contracts as well as the decline in the use of fixed-line telephones in favour of mobile phones.

But this was offset by increased take-up of broadband and digital television, as well as the triple-play package.

Overall customer churn – the percentage of customers who give up its service - was flat in the fourth quarter at 1.5%.

It helped cut NTL’s operating losses for the year from £52.5m (€76m) in 2004 to £19.7m (€28.9m) last year. Net losses were £421m (€605m) compared with £484.9m (€712m).

Nearly a third of NTL’s 3.1 million residential customers now subscribe to the triple-play package – up 27% from a year ago.

Telewest also increased the number of people subscribing to triple-play in 2005 to more than 37% of its 1.8 million customers.

The company – which agreed to a marriage with NTL last year – saw fourth-quarter revenues improve from £336m (€493m) to £435m (€639m) while net losses narrowed from £17m (€25m) to £14m (€20.5m).

The two companies will ask their shareholders to approve the proposed merger on Thursday.

NTL chief executive Stephen Burch said both companies had made “considerable strides” in the fourth quarter in adding to their customer bases and growing their broadband and triple-play operations.

“As we enter 2006, our efforts will be focused on successfully integrating NTL and Telewest,” he added.