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

Revenue growth was weaker but EBITDA growth remained strong and capex fell, sending cash flow growth strongly positive

French altnet Neuf Cegetel is buying Club Internet from Deutsche Telekom for an estimated €500 million and will overtake its rival Free as the #2 on the DSL market, still way behind Orange

The performance of the international business remains solid

50% of UK households now have a broadband line installed, but market growth is dropping. Rolling 12-month net additions were below three million for the first time since Q3 2004

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

The distribution business was slightly weak despite good like-for-like store sales, due to the lower quality ‘off-the-page’ newspaper advertisement business being successfully cut back by the mobile operators

Swisscom's recent acquisition of 82% of Fastweb, among the largest altnets in Europe, provides the context for a much-needed strategic review. Fastweb is the principal competitor to Telecom Italia in the supply of telecoms services to business and residential customers, delivered mainly over its own network, which developed through local loop unbundling. Fastweb's has a sterling reputation with customers (in relation to TI's generally poor one). In this context, further network expansion should top Swisscom's review agenda, as well as Fastweb's IPTV offer, which has not proved to be a commercial success

Growth in revenue and EBITDA was adequate but a nasty surge in capex hit cash flow

The loss of Sky basic channels, strong competition and a maturing broadband market have combined to weaken Virgin Media’s top line results sufficiently to cause cash flow to decline