Virgin Media - Above Inflation Rises from 1st February

[jungleguy]

VM operate on the theory of inertia....they put prices up and most customers do nothing. What I don't understand is that after all these price rises the share price has slumped by 30% over the last 6 months.

Originally Posted by qasdfdsaq

That's just a guess with made up numbers though, for all we know it could cost them £50 to provide £30 worth of services.

Unlikely sustainable business model.

It would be be like running a University course that costs £30k per year to run based on a £9k fee.

The standard metric is that it costs 6-7 times more to acquire a new customer than to retain an existing one.

http://www.signalmind.com/infographi...s-vs-retaining

[Mr K]

Originally Posted by jungleguy

VM operate on the theory of inertia....they put prices up and most customers do nothing. What I don't understand is that after all these price rises the share price has slumped by 30% over the last 6 months.

Losing customers though and these rises are going to accelerate that.
http://informitv.com/2015/11/05/virg...n-subscribers/

People are more ready to switch or downgrade their services than they used to be. Sky are launching a new box, far more advanced than anything VM have to offer. They may be good for Broadband, but VM have failed to develop the TV service. My Sinclair ZX Spectrum is faster than Tivo...

A far more imaginative strategy would be to scrap line rental, and lay down the gauntlet to Sky/BT. Instead they're going for the trying to fleece the remaining customers. All they've offered lately are 'free' (ha ha !) BB speed upgrades, to speeds no ones got any use for anyway.

[Kabaal]

Originally Posted by qasdfdsaq

That's just a guess with made up numbers though, for all we know it could cost them £50 to provide £30 worth of services.

Your reply made my point.

[JPAC]

Originally Posted by jungleguy

VM operate on the theory of inertia....they put prices up and most customers do nothing. What I don't understand is that after all these price rises the share price has slumped by 30% over the last 6 months.

I'd use apathetic rather than inertia, the same reason BT still has any customers. Be interesting to see some figures or a graph of VM subscribers to see just how many are leaving, especially since this latest price hike. (10% in my case, 20 days left to make my cancellation decision).

[qasdfdsaq]

Originally Posted by Kabaal

Your reply made my point.

Your reply made my point.

[Ignitionnet]

Originally Posted by Mr K

A far more imaginative strategy would be to scrap line rental, and lay down the gauntlet to Sky/BT. Instead they're going for the trying to fleece the remaining customers. All they've offered lately are 'free' (ha ha !) BB speed upgrades, to speeds no ones got any use for anyway.

All well and good but where do you suggest the company makes up the money they would lose from line rental?

Sky/BT bury a fair amount of the cost of providing broadband into line rental, as do VM. VM aren't anywhere near profitable enough that they could just ditch that income.

VM don't make much on the TV. Broadband is wildly variable in terms of profitability. Line rental helps mitigate both of those.

They could make some savings migrating to VoIP but it would be a while before these could be realised all over the network. Have to get everyone onto VoIP first.

Due to the amount of English language content Virgin Media UK and Ireland have the heaviest bandwidth users of the Liberty family. This has to come at a price.

---------- Post added at 00:24 ---------- Previous post was at 00:23 ----------

Originally Posted by jungleguy

VM operate on the theory of inertia....they put prices up and most customers do nothing. What I don't understand is that after all these price rises the share price has slumped by 30% over the last 6 months.

A lot of shares have dropped somewhat from their peak. Nothing to do with the companies, more bubble-icious stock market.

[Mr K]

Originally Posted by Ignitionnet

All well and good but where do you suggest the company makes up the money they would lose from line rental?

Well, from increased customers, and maybe a slight increase to other services - (however an overall significant reduction in price). Increase the number of punters not the price, to make the same if not more revenue. Make cable the only logical option if the street is cabled.

All my street is cabled but I'm the only cable customer; that's a lot VM are missing out on. Most are attracted by TV, which SKY lead on. VM lead on broadband but most have worked out they only need 10MB to do anything they could possibly want to do.

[qasdfdsaq]

Originally Posted by Ignitionnet

All well and good but where do you suggest the company makes up the money they would lose from line rental?

From the money they'd save from not having to maintain that balding dinosaur of a POTS network?

Originally Posted by qasdfdsaq

From the money they'd save from not having to maintain that balding dinosaur of a POTS network?

Considering that there are over 12 million pensioners in the UK at this time, and from personal experience with aged relatives, not that many are IT-savvy, can you imagine the outcry if BT/VM/etc withdrew landlines, as for many, this is their main way of contacting others.

[ileikcaek]

My assumption is VM can move to packetcable VOIP services relatively easily (I assume this is what will happen anyway because it is common on other cable ISP's), the new modem has two telephone ports, I would guess they could also manufacture a voice gateway 'modem' with telephone port (possibly even with a battery for power outages) for people who just wanted a basic phone service and no internet service.

I'm certain this can be done and save money in the long run because from my experience the Virgin POTS system is not in the best of shape, it's had problems for years in this area and isn't reliable at all. Crossed line issues, dead line, outages every other month etc.

VM's phone service isn't value for money anyway in my opinion.

[qasdfdsaq]

Originally Posted by Hugh

Considering that there are over 12 million pensioners in the UK at this time, and from personal experience with aged relatives, not that many are IT-savvy, can you imagine the outcry if BT/VM/etc withdrew landlines, as for many, this is their main way of contacting others.

VM *are* withdrawing POTS service though.

---------- Post added at 12:31 ---------- Previous post was at 12:31 ----------

Originally Posted by ileikcaek

My assumption is VM can move to packetcable VOIP services relatively easily (I assume this is what will happen anyway because it is common on other cable ISP's), the new modem has two telephone ports, I would guess they could also manufacture a voice gateway 'modem' with telephone port (possibly even with a battery for power outages) for people who just wanted a basic phone service and no internet service.

Yes, this has been in the works for some time.

[jungleguy]

Originally Posted by Ignitionnet

---------- Post added at 00:24 ---------- Previous post was at 00:23 ----------

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A lot of shares have dropped somewhat from their peak. Nothing to do with the companies, more bubble-icious stock market.

Sky shares up 10-15% over the same period

---------- Post added at 13:05 ---------- Previous post was at 12:39 ----------

I think your all missing the point regarding line rental. VM use to do broadband and TV at £20 per month. that got scrapped and now BB and TV is more expensive than taking a triple....the question is why? and the answer can also probably explain why BB solo has gone up from £20 per month to now a staggering £30.50 a month in just under 3 years. Virgin want to announce to the stock market 'quad play customers' so they've priced their products to 'encourage' customers to take triples. Its nothing to do with marketing or what the customer wants.....its all about what they want to announce to the share holders.......Lord Simpson - Marconi spring to mind and the error of jumping on a band wagon. The band wagon being 'quad play'

The other issue is VM thinks everyone wants 200mb broadband hence the high prices, and that's VM new product...... faster broadband how exciting. The reality is only a small proportion of customers want 200mb broadband, and I think you'll find that probably more than half would be more than happy with the 50MB connection........but guess what share holders don't want to here that either, so bundles are loaded so subscribers have to take XXL broadband.

[Kushan]

Originally Posted by Hugh

Considering that there are over 12 million pensioners in the UK at this time, and from personal experience with aged relatives, not that many are IT-savvy, can you imagine the outcry if BT/VM/etc withdrew landlines, as for many, this is their main way of contacting others.

Yeah but they wouldn't be removing anything, just telling them to use the VoIP ports of a newer hub.

[jb66]

Originally Posted by Kushan

Yeah but they wouldn't be removing anything, just telling them to use the VoIP ports of a newer hub.

They could always keep some landlines at an additional fee, for folk with alarms