Telewest blames viruses for lost broadband users

The cable company has won thousands more broadband users, but says that virulent code is partly responsible for scaring others away

The swarm of viruses that plagued computer users this summer was a factor in driving some broadband users away from Telewest, the cable company said on Thursday.

In its financial results for the third quarter of this year, Telewest blamed the effect of malicious code for lost broadband users, along with house moves and teething problems with a backend system. Telewest argues the effect of viruses on its business is part of a wider trend of malicious code, spam and other Internet nuisances turning consumers away from the Internet.

"Broadband churn rose in the [third] quarter to 14.7 percent due mainly to three issues which affected the early part of the quarter; a much publicised increase in virus activity, stability issues following an email platform upgrade and the seasonal effect of increased customer property moves in the summer months," Telewest told investors.

The company added that these issues have all now been resolved, with churn in September and October dropping to 13.7 percent on a monthly annualised basis.

A series of viruses, including Sobig and MSBlast, crashed networks and compromised the security of many millions of PCs this summer, and Telewest emphasises that this was a problem for the whole IT industry.

"We did suffer from what was a global problem with viruses," a Telewest spokeswoman told ZDNet UK. "The key is that all Internet service providers were affected, not just Telewest."

A report published last week by the Work Foundation warned that broadband customers are becoming disillusioned with a growing tide of spam, viruses, spyware and a lack of ongoing support from service providers.

Churn is an important issue for telecoms operators. The cost of advertising a service and offering special offers to new subscribers can be high, so investors are rarely impressed if too many of these hard-won customers soon move to another provider.

Overall, Telewest's broadband division appears to be performing well, and added 38,000 new broadband customers in the three months to the end of September.

As of 5 November, 2003, the company had 389,000 broadband customers, of which 32,000 were using the 1 megabit per second (Mbps) blueyonder service and 7,000 the 2Mbps product. The other 350,000 customers are signed up to Telewest's 512Kbps service.