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Virgin Media Back On Track
Posted February 9, 2012
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Neil Berkett
By Steve Birenberg
Virgin Media (VMED) had a tougher than expected 2011 as the crisis in Europe included the UK economy. In addition, competition picked up as all of the company's cable, satellite, and telecom competitors responded aggressively to the macro weakness. This environment led VMED to increase capital spending amid discounting form some competitors while its own subscriber growth slowed. Investors worried this was the beginning of period of slower growth and profitless prosperity for VMED as the company would need greater capital and marketing investment merely to maintain the current business model.
I was patient with VMED even as the stock slid from the low $30s to the low $20s because the excellent management team realizes the company maintains a key competitive advantage: the best broadband network in the UK. Earlier in 2012, the company clarified its capital spending plans and the stock appeared to bottom. Coinciding with its earnings report yesterday, management provided a complete strategic update that further explained how the company would sustain growth in operational and financial measures. The plan is to invest in the network by upping broadband speeds and enhancing the cable TV experience with Tivo's (TIVO) best in class user interface. READ FULL ARTICLE HERE
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