Netflix saw a bigger than expected surge in international subscribers in the third quarter, but losses continued to mount.

The streaming company now has 26 million subscribers outside the US after adding 2.74 million new customers in the three months to September.

It said it had underestimated the number of subscribers it would sign outside of its home market.

However, although revenues in international markets rose by almost 50 percent to $517 million (€452m), losses more than doubled to $68 million (€59m).

Losses are forecast to grow in the next quarter as the cost of launching in Italy, Portugal and Spain gets factored in.

Including the US, where 880,000 new customers joined, the total number of subscribers increased to 69.2 million.

Netflix said subscriber growth in the US was lower than expected due in part to the ongoing transition to chip-based credit and debit cards.

Total revenues rose 21 percent to $1.7 billion (€1.5b) with Netflix claiming the price increase it introduced in August did not negatively impact growth.

Rising costs across the board meant net income halved to $29.4 million (€25.7m)

In a letter to shareholders, the company said it was “clear that internet TV is becoming increasingly mainstream”.

According to a report from Ampere Analysis last month, Netflix will have at least 130 million subscribers by the end of 2020.

Telcos continue to sign deals with Netflix to get their content onto their product portfolios.

Last month, for example, Vodafone UK renewed its partnership with the company.

[Read more: Watch out TV land the telcos are coming, says report]

Paolo Pescatore, Director, Multiplay and Media at CCS Insight, said: “These latest results reinforce that [Netflix’s] future growth lies in overseas expansion.

“However, the principal obstacles will be the amount of investment needed to secure rights for each country and how quickly it can come profitable in each market.

“Regardless, we still believe that Netflix is a prime takeover target.

“All Web players are looking for a stronger presence in paid-for video, something Netflix has achieved with remarkable success - potential suitors include Apple, Alibaba and Google.”

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