Cable television, phone and internet firm NTL has said that tough rivalry in the UK market is costing it clients.
NTL has been buying firms such as Virgin Mobile to expand its services
NTL lost 18,900 customers in the three months to the end of June, compared with gains of 25,800 in the previous quarter and 62,500 a year earlier.
The losses have occurred as firms such as BSkyB and Carphone Warehouse offer rival broadband services, luring users.
Despite the problems, NTL managed to boost sales and profits thanks in large part to its takeover of Telewest.
Broadband growth slows
The newly-combined NTL-Telewest business had sales of £884.3m in the quarter, compared with £611.4m for just the NTL business in the previous three month period. Operating profit rose to £6.3m from £3.9m.
NTL said its merger with Telewest had allowed it to cut costs by £15m during the quarter.
The company has continued to expand and earlier this year, NTL bought Virgin Mobile so that it also could offer clients phone services.
However, NTL said that its level of churn, or the number of customers who stopped using its services every month, had increased to 1.5%, up from 1.3% in the previous quarter and 1.4% a year earlier.
The company also said it was adding fewer high-speed broadband internet customers, gaining 104,900 in the quarter compared with 149,900 in the same period a year earlier.
"Positive customer net additions in old Telewest areas were outweighed by net disconnections in old NTL areas," the company said.
"We expect this to occur again in the third quarter due to the credit policy changes we made at old NTL," it added.