By Simon Zekaria 
 

LONDON--Virgin Media said Friday it is investing billions of dollars over the next five years to expand its super-fast broadband Internet network as the U.K. cable operator reported a rise in quarterly revenue.

The company, owned by U.S. cable and media giant Liberty Global PLC, also said the network spend of GBP3 billion ($4.62 billion) -- which will increase the reach of its fiber-optic cable by 4 million homes and businesses to over 16 million -- will create 6,000 jobs.

The group called it the single largest investment in broadband digital infrastructure in the country for more than a decade, which will benefit the U.K. economy by GBP8 billion.

Separately, the operator said revenue in the three months to the end of December 2014 rose 4% to GBP1.07 billion , boosted by growth in cable subscriptions. Full-year revenue was up 3% to GBP4.21 billion.

Virgin Media said it now has 5 million cable customers, adding 77,000 in the year, excluding acquisition and disposals, which is an increase of 19,000 on the year-earlier period, it said. Two-thirds of its customers take so-called triple-play services of fixed-telephony, broadband Internet and television. "Churn"-or the rate at which customers leave a service-fell to 14.6% in the fourth quarter from 15.3% in the same period a year earlier.

Virgin Media, along with competitors BT Group PLC (BT.A.LN), Sky PLC (SKY.LN) and TalkTalk Telecom Group PLC (TALK.LN), is in a race to win subscribers through bundled offers of telephony, broadband and TV in the U.K.'s rapidly-converging telecom and media markets.

All the companies either offer or are set to offer so-called quadruple play services of fixed-telephony, mobile telephony, broadband Internet and TV. BT is also rolling out fiber-optic cable and is investing billions of dollars into content for its sports TV channels to win broadband customers.

Sky is 39%-owned by 21st Century Fox, which until June 2013 was part of the same company as The Wall Street Journal parent News Corp (NWS.AU).

At 0950 GMT, BT, Sky and TalkTalk shares were down 2.2%, 0.8% and 1.3%, respectively, at 440 pence, 920 pence and 319.4 pence.

"We wouldn't be surprised to see the whole U.K. triple [and] quad-play space come under pressure on this news," said Citi analyst Thomas Singlehurst.

Write to Simon Zekaria at simon.zekaria@wsj.com

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