The distribution business had a strong year, marred by a longer than usual Christmas hangover in the last quarter, but the early signs for the new financial year are promising

Virgin Media’s Q1 top line results were again mixed, with a growing number of customers leaving as competition intensifies, despite the rebrand to Virgin. But it could have been worse; most higher-spending customers are remaining

UK broadband market growth fell to 3.2 million net additions in 2006 from 3.8 million in 2005. With 47% of UK households already on broadband, new entrant unbundlers (BSkyB and Carphone Warehouse) are racing against the clock of a maturing market to sign up customers

The spat between Virgin and Sky over cable carriage of Sky basic channels has generated much blogging, mostly supportive of Virgin, although neither party appears to be gaining from the ‘zero sum game’ dispute

With 84,000 net pay-TV additions in 2006, Sogecable resumed subscriber growth, but we expect this pace to decline in 2007 unless Sogecable re-positions on basic and expands distribution from satellite to cable and DSL

Virgin Media’s Q4 results were again mixed – increasing competition is continuing to have a significant effect on net additions but, as yet, most higher ARPU customers are staying put, permitting modest revenue growth

Hostilities between Sky and Virgin have intensified during the course of cable’s re-launch, Sky’s announcement of its pay-DTT plans, and bilateral negotiations over channel carriage fee payments on the satellite and cable platforms

Carphone Warehouse’s core distribution business was firm, showing no signs of being harmed by Vodafone withdrawing its new contract business in the UK