Virgin Media Reports Third Quarter 2007 Results

Quarterly highlights

LONDON, England — Virgin Media Inc. (NASDAQ: VMED) announces results for the quarter ended September 30, 2007.

CABLE SEGMENT REVENUE

Consumer

Consumer revenue in the third quarter was £607.7 million (Q2 2007: £619.3m). The on-net customer base was 4.8 million at September 30, 2007, with net additions of 13,000 in the quarter. This represents a return to positive customer growth and is the best net additions performance since the cable merger in March 2006. The revenue decline primarily reflected a decrease in ARPU, being partially offset by customer growth.

RGU per customer grew to 2.26 from 2.23 in the quarter and triple play penetration increased to 47.0% from 45.2% in the quarter reflecting our drive to encourage bundling.

ARPU fell from £42.16 to £41.55 in the quarter, due primarily to strong price competition as we continued to offer compelling acquisition price points and offered discounts to existing customers. This was partially offset by growth in RGU per customer.

Gross customer additions in the third quarter were 256,500, up by 34% from 191,900 in the second quarter and up by 12% from 229,200 in the same quarter last year as a result of our quality products, compelling price points and improved sales efficiency.

Churn in the third quarter was 1.7%, down from 1.8% in both the previous quarter and the same quarter last year.

We continue to enhance our consumer propositions to exploit our unique quad-play capability, our advanced network and to differentiate our content offering.

We have completed our 20Mb broadband upgrade and have moved to the next stage of our 50Mb trial. We intend to increase broadband speeds in 2008 to significantly differentiate our offering from DSL. To that end, we are currently reviewing the implementation of DOCSIS 3.0 broadband standards.

We have significantly improved our content offering with the inclusion of six Setanta Sports channels for no additional charge in our basic XL package. Setanta has the rights to broadcast 46 Premier League football matches per season, 60 Scottish Premier League matches plus 25 FA Cup games per season from the 2008/9 season, along with other football, golf, rugby, racing, and motor sport events.

We are launching a new sports news channel, in partnership with Setanta later this month, which will be included in all of our TV packages.

Our sports offerings are also being complemented by our Virgin Media broadband portal, which has exclusive rights to offer near-live clips of all Premier League and Football League matches over the internet.

We continue to build our Video On Demand (“VOD”) offering which is available to all of our 3.2 million digital TV subscribers. 45% of our customers are now using our VOD service on a monthly basis compared to 36% at the start of the year. Average views per user per month in the third quarter were 17 compared to 10 at the start of the year. Total monthly views were 23 million on average in the quarter, up 23% on the previous quarter.

Unlike other providers, our range of VOD content is extensive including over 500 movies, highlights from the previous week’s primetime schedule, over 1,000 hours of top TV series and over 1,000 music videos and concerts available every day. We have VOD content available from HBO, Buena Vista, Warner, BBC, Channel 4 and Alliance Atlantis, as well as Virgin Media Television (“VMtv”). Further major content additions are expected as we strengthen our line up and add even more choice for our customers. We are working with the BBC on the launch of their iPlayer application, which will give VOD access to hundreds of hours of BBC content. We expect Virgin Media to be the first TV platform to launch this service, which will be heavily marketed by the BBC.

On October 1, 2007, we launched Virgin 1 on our own cable platform as well as satellite and Freeview. Our strategy is to maximise advertising revenues from the nine million home Freeview platform and to cross-promote Virgin Media’s unique VOD content and functionality, as well as other products and services. This will see VMtv accelerate its transformation from a linear pay-TV operator to a provider of a mix of free, pay and on-demand content that adds value to Virgin Media through cross promotion and exclusive content to differentiate us from our competitors.

Broadband

On-net broadband net additions in the quarter were 115,800, up strongly from 45,800 in the previous quarter.

Virgin Media now has 3.3 million cable broadband subscribers, which, together with 0.3 million off-net broadband subscribers, makes us the largest residential broadband provider in the UK.

Television

Total TV net additions were 20,400 in the quarter, up from 2,200 in the previous quarter. Digital TV net additions were 41,700, following net additions of 40,000 in the previous quarter.

We grew our V+ DVR subscriber base by 14% in the quarter, with net additions of 23,000. At the quarter end we had 190,200 V+ subscribers, representing 6% penetration of our digital television base.

Telephony

On-net telephony net subscriber losses in the quarter were just 1,300, a significant improvement compared with 56,900 net losses in the second quarter.

Recent improvements are due to a refocus in the way we market and sell our bundles, to ensure that telephony is emphasized at the point of sale. We have also reduced telephony churn.

We continued our strategy of increasing the number of subscribers on flat rate packages to grow subscribers and reduce the impact of declining fixed line telephony usage. We are continuing to rebalance our pricing by reducing prices of our two main fixed rate packages and increasing some variable call rates.

Off-net

Consumer off-net revenue, which is included in total consumer revenue, was £17.3 million (Q2 2007: £16.2m). At the quarter end, we had 282,300 off-net broadband subscribers, with growth of 7,100 in the quarter. We also added 15,000 off-net telephony subscribers during the quarter and now have a base of 90,500.

Business

Business revenue was £160.0 million, up £4.2 million compared to the previous quarter primarily due to growth in data revenue. The majority of this increase was due to greater LAN solutions data revenue from our infrastructure contract at the UK’s largest airport together with continued growth from our other retail Ethernet and IPVPN data products.

Our wholesale revenues were flat versus the prior quarter following completion of the expected contractual declines highlighted in the first two quarters of 2007.

Across both our retail and wholesale sales channels, total data revenues were £99.0 million representing 62% of total Business division revenue and up from £94.9 million and 61% in the prior quarter.