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ISP Virgin Media UK Reports Mild Broadband Customer Growth

Wednesday, May 6th, 2020 (10:53 pm) - Score 2,210

Cable ISP Virgin Media UK (Liberty Global) has today published their Q1 2020 results, which saw them add +8,200 new broadband customers in the first quarter (up vs +1,900 in Q4 2019) to total 5,279,200. Meanwhile the coverage of their 1Gbps capable broadband and TV network grew by another 93,000 premises.

The main development for Virgin Media since the last update has been the rapid spread of COVID-19 (Coronavirus), which has had a huge impact on the wider UK market and changed consumer behaviour. As a result of this it will be impossible to view the Q1 2020 results in a normal light (the same goes for every other network operator) and the next quarter also seems likely to be affected.

Otherwise VM has continued the expansion of their 1Gbps (Gig1Fibre) capable DOCSIS 3.1 network upgrade, which most recently went live across the West Midlands and aims to cover virtually all of their network by the end of 2021 (here). On top of that the operator has also signed £500m worth of deals to help insource their home engineers (here) and has started to make their HUB 4.0 router more widely available (here).

Elsewhere VM suffered an embarrassing data breach, which exposed sensitive personal records belonging to 900,000 UK customers (here), and O2 UK’s parent (Telefonica) has confirmed that they’re in talks with Liberty Global about a possible merger with VM in the UK (here). However, generally speaking, today’s results didn’t include any major surprises, but in terms of their latest customer figures the situation is as follows.

VM UK Customer Figures for Q1 2020
5,279,200 Internet – (up from 5,271,000 in Q4 2019)
4,579,100 Phone / VoIP – (down from 4,605,500)
3,220,400 Mobile – (up from 3,179,500)
3,621,800 Video / TV – (down from 3,687,400)

Today’s results also included an update on the pace of their Project Lightning network expansion, which originally aimed to add 4 million extra premises by the end of 2020 (2 million via FTTP) but is now expected to take much longer to achieve that. Overall they added 93,000 extra premises to their UK network coverage (down from 154K in the previous quarter) and this makes for a total of 2.2 million UK premises since 2015/16.

As it stands Virgin Media has contracts that will see their build continue for the next few years and they’re clearly not in a rush to reach the original 17 million premises target. We should point out that Q1 is a traditionally slow quarter for build (weather, holidays etc.) and the COVID-19 crisis certainly won’t have helped.

Project Lightning Rollout Since 2017
Q1 2020 = 93,000 Premises (likely impacted by COVID-19)
Q4 2019 = 154,000 Premises
Q3 2019 = 119,000 Premises
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: The last cost per premises estimate was c.£620 and they’re achieving 30-35% penetration after 3 years. Virgin’s UK network currently covers a total of 14,981,500 UK homes passed.

On the financial front Virgin Media reported total quarterly revenue of £1,266.3m (down from £1,331.7m in the previous quarter), although the full impact of COVID-19 is not yet known. The good news is that, while broadband adds may be subdued, their new Project Lightning build areas seem to be the ones still generating new customers; even though this is being off-set by losses elsewhere.

Lutz Schüler, CEO of Virgin Media, said:

“Despite these tough and challenging times, Virgin Media remains in a strong position with a clear strategic focus and direction as well as a wholehearted commitment to keeping the country connected and our people and customers safe.

Our aim to become a national connectivity champion is continuing to gain momentum. We’ve seen a record number of new mobile contract subscribers in the quarter and the success of our Oomph bundles has driven a leap forward in converged customers who now make up more than a fifth of our entire cable base.

Project Lightning continues to deliver, with our network now reaching a total of 2.2 million additional premises, and we are moving ahead at pace with our next-generation gigabit broadband rollout which is on track for completion by the end of 2021. Following further speed boosts for our existing customers in Q1, almost our entire broadband base is receiving speeds of 100Mbps or more [over 95%] – around double the UK average.”

Outside of the above we continue to await news of Liberty Global’s ambition to establish a new alternative network (Liberty Networks) in the UK, which could potentially serve the UK’s other 10 million premises – beyond Virgin Media’s existing network area (here) – with FTTP. In keeping with that we’re also still waiting to see if Virgin Media opens their existing network up to wholesale access (here).

No doubt the current COVID-19 situation will be having an impact upon some of those plans.

Leave a Comment
5 Responses
  1. Avatar Harmz

    Speed update details still not confirmed then @Mark?

  2. Avatar FibreBubble

    Another poor quarter for adds. Customers are leaving as fast as Virgin can dig (albeit shoddily) to new areas.

    Especially disappointing numbers considering Sky and Openreach engineers are not installing anywhere that needs a home visit due to virus concerns. Virgin are not so fussy about customer and staff safety so they have a clear run on installs at the moment.

  3. Avatar Matt

    Comptetion is starting to heat up in some area’s, which is good to see.

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