UK Cable ISP Virgin Media Grows to 4.76 Million Broadband Subscribers

Cable operator Virgin Media (Liberty Global) has released its latest results (Q1 2016 calendar) and revealed that they added +70,400 broadband subscribers in the quarter to make for a total of 4,765,300 (up from the +69K added in Q4 2015) and the reach of their network is continuing to expand.

The results confirm that Virgin’s Two-Way Homes Passed figure (i.e. homes on those sections of Virgin’s hybrid cable coaxial and fibre optic network that are technologically capable of providing two-way services, including video and Internet) has reached 12,960,800 (up from 12,891,300 in the previous quarter).

As usual the operator’s increased coverage in urban areas is largely being fuelled by their on-going Project Lighting network expansion, which aims to reach around 17 million UK premises by 2019 (60-65% UK coverage) and 500,000 of the extra 4 million planned by 2019 will be added this year (250,000 were done last year); 70,000 of these were completed during Q1. So far the build cost per home, penetrations and ARPU are said to be “in-line with [VM’s] business plan“.

At this point some people might be expecting the expanded network coverage to have resulted in a sharper take-up surge, but as we’ve seen with general deployments on other projectss (e.g. BDUK and BT’s UK roll-out of FTTC dominated “fibre broadband“) the reality is that uptake in urban areas often lags behind and grows at a slower pace.

Slow uptake is due to various factors, such as consumers being unaware of the new service, people being locked into long contracts with their existing ISPs, higher prices and or satisfaction with an existing service etc. On the other hand Virgin’s broadband base grew by +64,000 in Q4-2014 and lately they’ve been adding around +70k a quarter (see top).

Elsewhere Virgin Media has also announced that over 1 million premises – around 25% of their expanded network deployment – will be catered for via ultrafast Fibre-to-the-Premises (FTTP) technology (here). On top of that they’ve also expanded their business focused 300Mbps package to domestic properties via the pricey Home Works add-on (here).

Virgin Media Results Statement (Broadband Related)

From a new build perspective, Project Lightning is a key source of customer growth for us in the U.K. We have already released approximately 330,000 premises since the programme launched in 2015. We are ontrack to add over 500,000 premises in 2016, which would take our total Lightning homes released to over 750,000 by the end of the year. Our ultrafast speeds of 100 Mbps and higher are now taken by nearly half of our 5.1 million broadband subscribers, up from 36% in Q1 2015.

In our business division, we launched a new marketing campaign during the quarter centred on our 300 Mbps broadband service for small businesses and home office workers. Our TechCity proposition, which offers dedicated fibre connections to high-tech business hubs in major cities, also boosted sales during the quarter. This proposition was launched in London and Manchester during 2015 and during Q1 was extended to Birmingham. There are plans to launch in other U.K. cities throughout the year.

On the financial front Virgin Media delivered total quarterly UK revenue of £1,177.9m (up from £1,122.6m at the end of 2015) and their monthly Average Revenue Per Customer Relationship (ARPU) was £49.82, which is up slightly from Q4 2015’s £49.74. The operator is also home to 2,997,400 mobile subscribers (EE’s network), which is down from 3,016,400 last year (Virgin says this is due to growth in higher-value postpaid subscriptions being offset by an expected reduction in their prepaid base).

Otherwise there’s not a lot new to report and strangely we still haven’t seen Virgin Media shouting about the availability of their new Hub 3 / SuperHub 3 router (spec details), which has been quietly circulating to some new and existing subscribers since around Christmas. Normally ISPs like to shout about the launch of new kit, but not this time.

Similarly Virgin hasn’t said anything new about their plans to conduct a proper customer trial of Gigabit capable DOCSIS 3.1 technology and that’s not for lack of asking, even though some supporting hardware is already being built into their on-going network deployment. Parent Liberty Global has previously pegged a commercial launch for the end of 2016, but Virgin sometimes follow a little later than other operators in the group.