Cable operator NTL posted a five per cent fall in fourth-quarter revenues as it prepared to complete its merger with rival Telewest.
NTL, which has made a £900 million indicative offer for Virgin Mobile, said turnover fell from lost contracts with AOL and Vodafone.
But the company slashed annual losses as it increased residential customer base and numbers subscribing to its triple-play TV, telephone and internet service.
Telewest's fourth quarter results were boosted by an increased up-take of triple-play.
The deal between NTL and Telewest is expected to be closed on Friday, but NTL refused to comment on a possible link with Virgin Mobile. It is thought a deal could be struck within two weeks.
Revenues at NTL fell from £512.3 million in the last three months of 2004 to £484.6 million at the same stage last year.
It dragged full-year revenues down three per cent to £1.95 billion despite NTL adding nearly 200,000 residential customers in 2005.
Business revenues were hit by a loss of contracts and decline in the use of fixed-line telephones in favour of mobile phones.
But this was offset by increased take-up of broad-band and digital television, as well as triple-play.
Overall customer churn - the percentage of customers who give up its service - was flat in the fourth quarter at 1.5 per cent.
It helped cut NTL's operating losses for the year from £52.5 million in 2004 to £19.7 million last year. Net losses were £421 million compared with £484.9 million.
NTL, which has customers in the Lichfield and Tamworth areas, said its fourth-quarter net loss was £56.2 million, compared to £73.6 million in the equivalent 2004 quarter.
Nearly a third of NTL's 3.1 million residential customers now subscribe to the triple-play package - up 27 per cent from a year ago.
ARPU, the average amount of revenue per customer, slipped to £38.98 from £39.08 in the third quarter.
Telewest, which has thousands of customers in Birmingham and the Black Country, also increased the number of people subscribing to triple-play in 2005 to more than 37 per cent of its
1.8 million customers. The company - which agreed to a marriage with NTL last year - saw fourth-quarter revenues improve from £336 million to £435 million while net losses narrowed from £17 million to £14 million.
Telewest added a net of 20,000 subscribers in the fourth quarter for a total of about 1.8 million, with churn falling to 1.2 per cent and ARPU flat at £45.17.
The two companies will ask their shareholders to approve the proposed merger tomorrow.
NTL chief executive Stephen Burch said both companies had made "considerable strides" in the fourth quarter in adding to their customer bases and growing their broadband and triple-play operations.
"As we enter 2006, our efforts will be focused on successfully integrating NTL and Telewest," he added.