VMO2 ‘gaining momentum’ despite customer losses

Virgin Media sign, above a Virgin Media store in the UK

Source: Alamy.com

Liberty Global and Telefónica-backed UK service provider Virgin Media O2 saw its fixed customer base decline slightly – by 2,000 – in the first quarter, with a larger decline for its contract mobile base – down 74,500.

The fixed line base stood at 5.8 million at the end of Q1, with the reduction attributed to lower gross additions. The company, implementing price rises in Q2, saw stable ARPU on fixed during the quarter at 346.25.

VMO2’s contract mobile base ended the quarter at 16 million, driven by a reduction in handset sales and disconnections related to the decommissioning of a legacy billing system. Total mobile connections grew thanks to IoT connection gains and wholesale gains, offset by the reduction in mobile users.

Q1 total Revenue decreased 0.5% year-over-year to £2,588.8 million, as revenue excluding the impact of VMO2’s nexfibre off-net fibre construction decreased 4.3%. The company said the main cause was lower low-margin handset revenue.

Adjusted EBITDA decreased 1.4% year-over-year to £935.4 million, or a 1.6% decrease excluding nexfibre construction. The company blamed B2B fixed headwinds and investment in IT and digital efficiency programmes partially offset by growth in mobile service revenue.

“While there is much to do in the remainder of the year, we are gathering momentum in accelerating fibre build and marketing the nexfibre footprint, launching new services to enhance and improve customer experience, and progressing wider IT efficiency programmes as we continue our digital transformation,” said CEO Lutz Schüler.

“Ahead of price rise implementation, we delivered improved service revenue growth across both mobile and consumer fixed. Our teams also continue to innovate as shown by the targeted launch of 5G Standalone and a new 2Gbps broadband service on the nexfibre network in Q1, highlighting the future evolution of our networks as demand rises and new technologies emerge. Our performance in Q1 sets the foundations for our full year guidance as we make key investments to support future growth.”

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