Customer growth rates fall at Virgin

Despite a major increase in marketing spend, Virgin Media's customer growth rates are slowing as its customers react to the absence of Sky channels from its network.

Virgin Media spent an extra £25 million on its rebrand and marketing during the first quarter. This was more than the £16 million it had predicted when it issued its fourth-quarter results in February, but it has failed to stem a decline in customer sign-ups.

Despite an ad campaign, which starred Uma Thurman, Virgin Media's gross customer additions fell to 184,300 in the first quarter from 215,500 in the final quarter of 2006. New digital TV customers totalled 75,200, down from 83,900.

Virgin, which is dropping Thurman from its TV advertising in favour of Ruby Wax, blamed "the loss of BSkyB's basic channels from our platform and increased competitor activity" for the reverse.

Announcing a drop in customer churn levels, Virgin Media's chief executive, Steve Burch, warned the full effect of the Sky row has yet to be felt.