Virgin Media suspends 4 staff over misreporting connections

Shakes up top brass after 142k misrepresented in £3bn Project Lightning

Virgin Media has admitted to overstating its £3bn Project Lightning superfast broadband rollout by 142,000 premises – a move that has led to the suspension of four staff and a reshuffle of its top brass.

Parent company Liberty Global embarrassingly had to revise down the reported number of premises added to Virgin Media's network in the fourth quarter of 2016 as part of Project Lightning to 86,000, due to misrepresentation concerning so-called Inactive Premises.

In a financial statement today it said the company discovered that the construction work necessary to connect a substantial number of the Inactive Premises "had not progressed as originally understood". It then initiated an internal review of "the circumstances that led to the overstatement of their construction progress".

It said the review found that the completion status of a number of Inactive Premises had been misrepresented. "The company has determined that most of the Inactive Premises did not meet the prescribed requirements for inclusion in that category as of year-end 2016. We expect that all of these Inactive Premises will be connected before June 30, 2017."

Paul Buttery, chief operating officer in charge of driving customers to upgrade to the network, left the company in late February.

In response to the announcement Virgin has beefed up its management team today, having appointed Liberty Global's transformation officer Dana Strong as president and chief operating officer; Jeff Dodds, head of mobile at rival TalkTalk, as managing director, mobile; and an expanded role for Peter Kelly, managing director of Virgin Media Business.

Philip Carse, analyst at Megabuyte, said: "In financial terms, this misreporting is a non-event due to the number of miscounted homes (129,000) representing barely 0.9 per cent of homes passed, with reported historic revenues, profits and cash flows and guidance unchanged.

"However, it is more important symbolically as it suggests some inadequate controls on what is a major capex project for the company. In addition, the reduction in quoted penetration rates begs the question as to whether other Virgin Media KPIs have been calculated in a way that presents the company in a better light." ®

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