Virgin Media Hit 5.266 Million UK Broadband Users as Network Grows

Cable ISP Virgin Media (Liberty Global) added another +7,100 UK customers to their broadband network during the second quarter of 2019 (down from +35K in Q1), which takes their total base to 5,266,700. Over the same period their network has deployed to cover another 130,000 premises (up from +102K last quarter).

The main developments since Virgin’s last quarterly report have included their move to gobble up Sky Broadband’s old trial FTTH network in Derbyshire (here), as well as our report on the cities that look likely to be included in their initial DOCSIS 3.1 orientated “gigabit cities” deployment (here), a package refresh (here) and a leak of their plans to launch a new cloud based user interface for their Hub 3.0 routers (here).

In keeping with that DOCSIS 3.1 news, Virgin Media also confirmed that their rollout of 1Gbps speeds would start in Southampton and reach the rest of their network by 2021 (here). Meanwhile today’s results reveal that the pace of their Project Lightning network expansion has increased during the second quarter of 2019, which saw them add 130,000 extra premises to their network coverage (over 1.8 million UK premises added since 2015/16).

The original aim of this effort was to cover 4 million additional premises (17 million total or c.60%+ of the UK) by the end of 2020 (later revised to 2019 before it was discovered in 2017 that they’d erroneously overstated progress), although c.2 million+ now seems to be a safer bet for the end of 2019 and possibly 3-4 million+ at a later date (here).

Officially Virgin remain coy about how far they intend to go with Project Lightning but the recent Avonline Networks deal (here) confirmed that they intend to keep building out their network until at least 2023. So they may yet reach the original 4 million goal, albeit significantly later than originally planned and possibly some of this could end up being done via a new alternative network company (here).

Project Lightning Rollout Since 2017
Q2 2019 = 130,000 Premises
Q1 2019 = 102,000 Premises
Q4 2018 = 144,000 Premises
Q3 2018 = 109,000 Premises
Q2 2018 = 118,000 Premises
Q1 2018 = 111,000 Premises (likely impacted by heavy snow)
Q4 2017 = 159,000 Premises
Q3 2017 = 147,000 Premises
Q2 2017 = 127,000 Premises
Q1 2017 = 102,000 Premises

NOTE: Q1 is traditionally a slower quarter for build due to various issues (weather, holidays etc.). The current cumulative cost per premises is c.£690 (just the build costs would be £660) and hitting 30-35% penetration after 3 years.

Initially much of this build focused upon extending Virgin’s already very capable Hybrid Fibre Coax (HFC) network, although we note that last year 60% of their build was done with Fibre-to-the-Premises (FTTP / RFoG) technology and in Q1 2019 this had increased to 86%. No figure for this is given today for Q2.

Mike Fries, CEO of Liberty Global, said:

“We are also focused on enhancing the strategic and financial value of our core operating businesses, particularly Virgin Media which remains the most advanced broadband and fixed/mobile provider in the U.K. with substantial opportunities for expansion and growth. With 500 Mbps already available to nearly 15 million homes and 1 Gbps speeds just around the corner, Virgin Media is miles ahead of other U.K. operators in providing ultrafast broadband, both today and into the future.”

The operator also confirmed that they had a total Mobile (EE MVNO) customer base of 3,059,000 (up from 3,030,600 last quarter) and 79% of their broadband base is now on an ultrafast (100Mbps+) capable package (unchanged from last quarter). Elsewhere Virgin had 4,641,000 phone / VoIP customers in the UK (up from 4,617,300) and 3,822,100 video / TV users (down from 3,846,700).

Virgin Media reported quarterly revenue of £1,279.3m and it’s worth noting that Q2 (calendar) tends to be a seasonally slow one, which is often due to the movement of students (going back home for the summer and cancelling contracts etc.).