Unhappy time at Virgin Media ends for Burch
The 'family and personal reasons' cited as explanations for Steve Burch's decision to leave Virgin Media were said yesterday to be genuine, rather than the euphemism usually trotted out to cover up a sudden corporate or political parting of the ways. But they were only one factor, capping an unhappy period since Mr Burch was brought in by Jim Mooney, chairman of what was then NTL, to make sense of its merger with Telewest and the acquisition of Sir Richard Branson's Virgin Mobile.
Mr Burch, a veteran of Comcast who had taken some credit for the US cable group's rapid integration of 2m AT&T Broadband subscribers, was a hands-on executive who could bring 'gold-standard' practices to the UK's under-invested cable industry, Mr Mooney said at the time.
But just over 18 months later, Mr Burch has become the third chief executive of the former NTL to leave suddenly since Mr Mooney arrived in 2003. Rumours about Mr Burch's position have circulated for months, amid reports of tension with his powerful chairman.
Mr Mooney, based in the US, took the lead on the company's negotiations with private equity groups and other suitors, leaving potential bidders with the impression Mr Burch had been sidelined from strategic discussions.
Analysts said Mr Burch should take credit for integrating the former NTL and Telewest, improving customer service and harmonising technology systems, but said he had not stemmed the market share losses to aggressive competitors.
Second-quarter figures released this month showed the group losing market share in every area. Underlying revenues from its core consumer business were down 4 per cent, and just 125,000 of its 4.7m customers had signed up for its 'quadruple play' bundle of pay-TV, broadband, mobile and fixed-line telephony.
Mr Burch's arrival was followed by the entry of both Carphone Warehouse and British Sky Broadcasting into the broadband market, triggering a bruising price war, analysts noted.
'The arrival of Carphone and Sky would have been a challenge to any manager, particularly a manager coming in from the US,' said Claire Enders of Enders Analysis.
Mr Burch's operational achievements were also overshadowed in the past six months of his tenure by a bitter public relations battle over the cost of carrying BSkyB's channels, which cost Virgin Media 40,000 customers in the second quarter.
Mr Burch's departure leaves to Neil Berkett the challenge of promoting the new Virgin Media brand, solving its customer service and technology problems and finding revenue growth in an intensely competitive pricing environment.
Shareholders, analysts and people close to the company expressed faith in the new acting chief executive, saying he had the full support of Mr Mooney and the rest of the board.
'There is a lot of confidence in Neil,' a person close to the company said.
With intensifying competition, the prospect of a sale and the challenge to ensure his job becomes permanent, however, Mr Berkett's task seems no easier than the one Mr Burch faced.
Mr Burch, a veteran of Comcast who had taken some credit for the US cable group's rapid integration of 2m AT&T Broadband subscribers, was a hands-on executive who could bring 'gold-standard' practices to the UK's under-invested cable industry, Mr Mooney said at the time.
But just over 18 months later, Mr Burch has become the third chief executive of the former NTL to leave suddenly since Mr Mooney arrived in 2003. Rumours about Mr Burch's position have circulated for months, amid reports of tension with his powerful chairman.
Mr Mooney, based in the US, took the lead on the company's negotiations with private equity groups and other suitors, leaving potential bidders with the impression Mr Burch had been sidelined from strategic discussions.
Analysts said Mr Burch should take credit for integrating the former NTL and Telewest, improving customer service and harmonising technology systems, but said he had not stemmed the market share losses to aggressive competitors.
Second-quarter figures released this month showed the group losing market share in every area. Underlying revenues from its core consumer business were down 4 per cent, and just 125,000 of its 4.7m customers had signed up for its 'quadruple play' bundle of pay-TV, broadband, mobile and fixed-line telephony.
Mr Burch's arrival was followed by the entry of both Carphone Warehouse and British Sky Broadcasting into the broadband market, triggering a bruising price war, analysts noted.
'The arrival of Carphone and Sky would have been a challenge to any manager, particularly a manager coming in from the US,' said Claire Enders of Enders Analysis.
Mr Burch's operational achievements were also overshadowed in the past six months of his tenure by a bitter public relations battle over the cost of carrying BSkyB's channels, which cost Virgin Media 40,000 customers in the second quarter.
Mr Burch's departure leaves to Neil Berkett the challenge of promoting the new Virgin Media brand, solving its customer service and technology problems and finding revenue growth in an intensely competitive pricing environment.
Shareholders, analysts and people close to the company expressed faith in the new acting chief executive, saying he had the full support of Mr Mooney and the rest of the board.
'There is a lot of confidence in Neil,' a person close to the company said.
With intensifying competition, the prospect of a sale and the challenge to ensure his job becomes permanent, however, Mr Berkett's task seems no easier than the one Mr Burch faced.
Related Articles:
Comments
