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Cable Operator Virgin Media Grows to 4.92 Million UK Broadband Users

Thursday, February 16th, 2017 (7:49 am) by Mark Jackson (Score 1,793)
Virgin Media 2014 UK Logo

Cable operator Virgin Media (Liberty Global) has published their latest results to the end of 2016 (Q4), which saw their broadband base grow by +48.8K in the quarter (down from +59.9K in Q3) to total 4,916,700 customers. Some 215,000 extra premises have also been added to their network coverage.

So far the provider’s on-going £3bn Project Lighting network expansion, which aims to cover 17 million UK premises by 2019 (i.e. 4 million extra premises [2 million via FTTP] – boosting UK coverage to around 60-65%), has already reached 250,000 premises in 2015. Since then they’ve added 70,000 during Q1 2016, then 85,000 in Q2, 95,000 in Q3 and now 215,000 in the final quarter of last year.

Project Lightning Costs (Report Extract)

During 2016, we spent £377 million in total as part of our Network Expansion Program, which includes build costs of approximately £290 million related to the 465,000 premises added as well as other network and CPE related spend and build costs for premises in progress that are not included in our homes passed.

As a result of all this work Virgin Media’s network currently covers around 14 million UK premises and they expect to add a total of “up to” 800,000 extra homes and businesses to their coverage in 2017. However the slower quarterly growth in broadband subscribers has been put down to the impact of their November 2016 price hikes (here).

It’s also been a fairly busy quarter in other areas too, not least with the operator launching its new 4G mobile service (here) and a new / extended Mobile Virtual Network Operator (MVNO) contract with EE /BT (here). Finally they’ve also launched their new 4K capable V6 TV Set-Top-Box (here).

Other Report Highlights

* The average speed taken by Virgin’s U.K. broadband base has increased 22% YoY to over 100Mbps and monthly data consumption has increased to 160GB (GigaBytes) per month.

* Integration of Arqiva WiFi is underway following acquisition in Q4; its relaunch under the Virgin Media brand in February 2017 is expected to present strategic benefits to their [business to business] and consumer operations.

* 4G subscriptions taken by over 5% of Virgin’s U.K. mobile base by end of 2016 (4G was only launched in November 2016).

Elsewhere Virgin Media reported that they now have a total of 3,022,300 mobile customers on their EE based Virgin Mobile platform in the UK (down slightly from 3,028,400 last quarter) and 3,729,100 take their TV / video services (up from 3,723,500). On the financial front Virgin Media also delivered total quarterly UK revenue of £1,137.6m (up from £1,122.6m at the same time last year).

However we’re still waiting to hear about their plans for the new 300Mbps residential broadband package that exists for some but not all of their cable base. Plus a big question mark continues to hang over their long running efforts to turn existing SuperHub broadband routers into public WiFi hotspots (here). However trial users are currently testing a new beta firmware for the public / shared WiFi service.

Towards the end of 2017 we’re also expecting Virgin Media to start the commercial UK roll-out of their next generation DOCSIS 3.1 technology (details), which should be a fairly quick and cheap upgrade. However today’s results didn’t include any mention of this, which isn’t a surprise because VM has a tendency to keep everything under wraps until the very last minute.

We should also point out that Virgin Media (UK and Ireland) currently has total third-party debt and capital lease obligations of £12,145.9m. More here.

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20 Responses
  1. CarlT

    Good to see them more than keeping in budget despite this stage being quite HFC-heavy.

    The cheaper and faster FTTP should also help with keeping the costs reasonable. Very happy to see this, there was always a worry that the costs would be way higher than expected and deter further investment both from VM and any others.

  2. GNewton

    With a coverage of roughly 14 Million premises and 4.9 Million subscribers there is still a great potential for growth even in existing areas, if I understand these figures correctly. Once VM gets its bottlenecks sorted out, such a contentions and slowdowns during evening peak hours, and with a good marketing campaign, there is a good prospect for further growth.

  3. Mark

    Been with virgin for years.. Was awesome on 20 meg max available at time.. Then when able to upgrafe to 50 meg and 152 was terrible for almost 2 yrs but virgin reduced my bill and i lowered my package to 100 meg. But now view rgin has fixed it i get 106 meg down and 6.08 upload 24/7 and would not swap to talktalk if gave me free for life

  4. George M

    Project Lightening is of interest to me as it is planned to use FTTP in my street in direct competition to BTW FTTP.
    Yes I know most people would kill just for 1 of the 2 options but it is nice to see competition.

  5. MikeW

    Some small print on Project Lightning:
    “The 464,600 premises added in 2016 include 142,000 inactive premises at December 31, 2016 that have not yet received power and/or where head-end capacity upgrades or connection activities are required. […] Most of these inactive premises were related to fourth quarter 2016 activity.”

    It’s good to see progress ramp up, but the Q4 increase was 215,000 – so 142,000 is a very significant chunk of “not quite” good progress. Even now, half way through the next quarter, that inactive total is still 110,000.

    NBN got torn to shreds for reporting “premises passed” that were inactive, and couldn’t be ordered.

    If VM had reported an increase of 73k, then it would have been in line with previous quarters this year.

    We should also note that about 10% of activity on Project Lightning is in Ireland.

    • Carter

      Where are you getting those figures?

    • MikeW

      The Liberty Global results for their various entities:
      http://www.libertyglobal.com/ir-fixed-income-virgin-media.html

      The document is dated 02/15/17, US-style.

    • CarlT

      Wow. There I was thinking that my area was unusual in having homes unserved for several months after civils build.

    • alan

      “… The 464,600 premises added in 2016 include 142,000 inactive premises at December 31, 2016 that have not yet received power and/or where
      head-end capacity upgrades or connection activities are required. These inactive premises are planned to be connected during the first quarter
      of 2017. Most of these inactive premises were related to fourth quarter 2016 activity. As of February 13, 2017, the number of these inactive
      premises had declined to 110,000.”

      So it looks like all if not most those will likely be connected before summer with all definitely done by the end of summer if they carry on doing 32,000 every 2 months. Not really a major slip or delay by any means.

    • MikeW

      Except, of course, they intend to keep adding 200,000 per quarter for this year too.

      If on each of those quarters, they leave 140,000 inactive, and then connect at a rate of 32,000 per 2 months, the backlog will be 500,000 by the end of the year.

      Huge success, on a Trump scale.

      Incidentally, we don’t know whether these numbers (the 142,000 out of 215,000) represent a delay or slip of any sort. They could be planned.

      All we really know is that they got included in a quarterly financial report, in a headline figure, early. VM chose to include them in a figure that made this quarter look 2x-3x the norm, when it was nothing of the sort.

      I was ready to post here to congratulate VM for ramping up so that their rate of progress was approaching that of Openreach, until I found the footnote. It was a major disappointment

    • Carter

      “Except, of course, they intend to keep adding 200,000 per quarter for this year too.”

      Premises added, active and inactive are 3 separate figures in the report not one figure.

  6. MikeW

    One other incidental that surprised me: the monthly consumption of 160GB.

    @Ignition: Haven’t you always said that VM subscribers have the highest usage? Openreach figures say their NGA subscribers are averaging 260GB.

    • CarlT

      Historically they did, Mike. I would imagine the numbers are now skewed by that those are averages across all VM tiers while the Openreach numbers are for FTTx only.

      I guess you would have to drop all VM 5./70 Mb customers at least to get a reasonable comparison now.

    • MikeW

      Right… We need to allow for VM’s low-level users who, in a BT world, would likely have stayed on ADSL.

      In their previous quarterly report, the percentage who were on 100Mbps packages (or more) had just crept over 50%, so there are still a fair proportion of the low-level users to include.

      Perhaps we should compare, instead, to the numbers reported by Ofcom in their 2016 Connected Nations report. That has…
      – 132 GB per line, average.

      The breakdown there was:
      – 81 GB for lines up to 10Mbps
      – 153 GB for lines of 10Mbps and above
      – 169 GB for lines of 30Mbps and above

      VM Consumption appears to be ahead of the overall average, by about 30Mbps. And about par for the 30Mbps+ subcategory … no surprise, given they make up nearly 50% of that group.

    • CarlT

      Yeah I imagine what we’re seeing is the effect of ‘superfast’ being widely available from elsewhere other than VM. Heavier users moving from VM to FTTC/P solutions as it becomes available, and being willing to take the hit on headline speeds.

      I’m sure VM don’t mind this at all 🙂

  7. Adam

    Had this hotspot rubbish with BT, the second they force that on my and my SH I am off.

    • CarlT

      You are aware it doesn’t use any of the bandwidth your broadband tier covers, it has its own, right Sir?

    • Nuccco

      How do they do that? Do they have a second pair of wires into houses?

      It’s just sugar-coating especially if you’re on the top possible speed tier.

      I don’t mind, except that it’s a terrible waste of wifi spectrum. I don’t know which people have nothing better to do than to wander around quiet neighbourhoods looking for “free” hotapots.

      It makes sense in public places lik mlls and stations, not residential areas.

    • CarlT

      Separate service flow. The pipe going into the home has more capacity than VM sell, much the same as PON. No separate cable needed.

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