VMED Announces Price Hike

Analysts at Cross Research maintain their "buy" rating on Virgin Media Inc (NASDAQ: VMED), while raising their estimates for the company. The target price for VMED has been raised to $23.

Virgin Media has announced that it is increasing line rental charges for all fixed line telephony customers by £0.99/month, effective April 1. “We estimate this will impact FY10 Cable ARPU by about +£0.50,” the analysts say. Cross Research believes that VMED will announce additional price hikes during 2010.

“We believe that the combination of rate increases, RGU-driven ARPU growth, and up-sell to higher service tiers in broadband and video will generate total Cable ARPU growth of 4.1% for FY10, slightly higher than the 3.7% increase in 2009,” the analysts add. Cross Research has raised its EPS estimate for FY2010 from $0.22 to $0.35.

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