Virgin raises the bar again on broadband speeds

Pay TV and internet service provider Virgin Media has announced plans to extend its broadband speed advantage over its rivals with the roll-out of an "up to 100 megabytes per second" (MBps) service.The first areas of Britain set to benefit from the service upgrade are London, the South-East of England and Yorkshire. Virgin expects the roll-out to be completed by the middle of next year though, as at present, not all houses in an area serviced by Virgin's cable offering will be able to take advantage of the increased speed.At present Virgin Media's premium offering provides download speeds of up to 50MBps; the best rivals BT and BSkyB can offer is speeds of up to 20MBps for some customers, while TalkTalk advertises an "up to 24MBps" service. In small-scale trials of Virgin's juiced-up service internet usage "increased exponentially," the company said."We have already seen a massive uptake in the number of customers watching video rich services and bandwidth hungry high definition programmes and clips," said Virgin Media chief executive officer Neil Berkett.The new service will come at a fairly hefty price, however. Virgin is offering the service at £45 per month, initially, or £35 a month if users also take an £11.99 per month phone service. Virgin's current top tariff for the 50MBps is £38 a month.The news accompanied the release of the company's third quarter results which showed an increase in revenue in all segments of the business. Total revenue advanced to £978.4m from £919.4m the year before. Revenue from Cable services grew to £662.6m from £627.6m, while mobile services revenue jumped from £134.1m to £143.5m. Non-cable revenue surged to £20.1m from £14.4m. Business revenue climbed to £152.2m from £143.3m in the third quarter of 2009.Operating income virtually doubled to £101.7m from £51.1m a year earlier, while operating income before depreciation, amortisation, goodwill and intangible asset impairments and restructuring and other charges improved to £387.3m from £349m.Free cash flow rose to £119.4m from £109.9m while net cash provided by operating activities jumped to £319.6m from £281.8m."Our confidence in our long term ability to maximise our advantages to deliver strong free cash flow means we have been able to begin to execute on our plans to return capital to stockholders. We have completed an initial buyback of £125m of stock and retain the authority for a further £250m in the coming months. Today, we have also announced, the execution of conversion hedges which should further benefit stockholders by effectively increasing the strike price of our convertible notes to $35," Berkett said.