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Liberty Global returns to customer growth, O2 JV ‘on track’

Liberty Global has been able to confirm its full-year financial guidance after turning in solid Q2 results that saw revenue fall as a result of the impact of COVID-19, adjusted EBITDA remain flat, and subscriber numbers rise thanks to a rebound in the UK.

Revenue dropped by 4.5% to US$2.723 billion as a result of what president and CEO Mike Fries described as US$110 million in “generally low-margin COVID-19 related impacts”. Revenue was hit by the loss of sports events, particularly in the UK, where the closure of stores also had an impact on handset sales.

Adjusted EBITDA was down by 0.2% to US$1.188 billion, but operating free cash flow jumped by 18.2% to US$588 million as a result of “lower capital intensity”.

Virgin Media turned in its best subscriber growth numbers for Q2 in four years, adding 24,000 customers in the quarter. This was offset by losses in Telenet in Belgium and – especially – UPC Switzerland, which saw its numbers drop by 16,000 in what the company described as a competitive market. The overall result was an increase in Liberty Global’s overall base of 7,700, which it said was its best result in two years. The growth compared with a loss of subscribers to the tune of 29,000 for the prior year period.

Fries highlighted the operator’s ongoing success in marketing fixed-mobile convergence, which helped fuel a rise of 100,000 contract mobile subscriptions. Fixed-mobile convergence now accounts for 23% of the UK base, 46% of the Belgian subscriber base and 22% of UPC Switzerland’s base.

The convergence play will receive a significant boost in the UK if Liberty’s proposed JV combining Virgin Media with Telefónica’s O2 is approved. Fries said that the merger plan was on track.

“We are making great progress with pre-merger planning for our announced combination of Virgin Media and O2 UK, and are working closely with the European Commission and U.K. regulators to ensure a smooth review of the transaction,” he said.

Virgin Media meanwhile said it was launching gigabit broadband services a to almost one million homes in Glasgow, Leeds and Bradford, increasing its gigabit footprint.