Right to cancel bites into Virgin Media O2 Q2
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Editor
| 25 July 2023
Noting that it is having to navigate a tough economic climate but that it has a clear long-term strategy to continue to deliver for customers, leading UK operator Virgin Media O2 has reported a second quarter with positive revenue performance and EBITDA growth but with falls in subscribers.
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For the three months ended 30 June 2023, Virgin Media O2 generated transaction adjusted revenue of £2.7 billion, up 6.2% compared with the same period a year earlier, driving transaction adjusted EBITDA of £1.0 billion, a year-on-year rise of 4.6%. Transaction adjusted EBITDA – capex was £467 million, inching up 1.9% on an annual basis.

The quarter also saw more than £500 million invested in the second quarter with £2 billion expected to be invested across 2023. The company’s total fixed-line premises serviceable was 16.4 million by the end of June 2023, 58% of total UK households, with network expansion accelerated to see 175,500 premises built in Q2. This was predominantly on behalf of the nexfibre joint venture for which VMO2 is the build supplier and wholesale tenant of this network.

Virgin Media O2’s full-fibre footprint now stands at 3 million homes and the company says that it will increase this figure to around 4 million by the end of 2023 with the infrastructure offering gigabit speeds of up to 1.1Gbps across the entire VMO2 footprint.

VMO2’s total fixed-customer base stands at 5.8 million but with a loss of 24,700 customers in Q2. VMO2 attributed this to customers having a right to cancel from price rise notifications, something that the operator says was expected. The company also lost 15,300 broadband connections in Q2.

Virgin Media O2’s total mobile connections (contract & prepaid) stood at 24 million. Virgin Media O2 mobile contract base stable at 16.1 million with a slight net reduction of 1,500 in the quarter. O2 monthly consumer contract churn remained low at 0.9% and 1.5 million customers took one of the company’s converged fixed-mobile Volt bundles. 5G mobile was available in more than 2,800 towns and cities / on-track to reach 50% of UK population in 2023.

Commenting on the results, Lutz Schüler, Virgin Media O2 CEO said: “Amidst higher costs, rising usage and continued investment, we executed necessary price increases in line with our expectations with this starting to flow through to our Q2 revenue and EBITDA growth. Demand for our award-winning connectivity remains, and our significant network investments and service improvements ensure we can meet all customer needs today while preparing for the decades ahead. For the rest of the year we remain focused on building commercial momentum, realising the synergies of the Joint Venture and future proofing our networks.”