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Virgin Media Cover 125k More UK Premises as New TV Service Looms

Thursday, November 5th, 2020 (7:27 am) - Score 19,536
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Broadband ISP and TV provider Virgin Media (Liberty Global) has just published their latest Q3 2020 results, which saw their UK network coverage grow to reach another 125,000 UK premises and their broadband base add +47,000 new customers (up from +39.2k in the previous quarter) to total 5,365,400.

Since the prior results Virgin Media has seen a number of developments, such as being wrongfully targeted by UEFA’s crackdown on illegal IPTV streaming websites (here) and launching a new 15Mbps package for vulnerable customers on Universal Credit (here). The operator is also preparing to launch their new next generation TV 360 service (here), but we’ll come back to that at the end.

More recently they’ve also completed a trial that pushed their new DOCSIS 3.1 network to deliver a download speed of 2.2Gbps and uploads of 214Mbps (here). On top of that they now expect their Project Lightning network expansion to reach a further 1 million premises (16 million total) within 12 months of their merger with O2 closing.

However, probably the biggest development has been the official confirmation of their “ambition to accelerate investments and connect a further 7 million homes to gigabit broadband in the coming years,” although the details of precisely how they’ll approach that remain unclear (here). Finally, the coverage of their 1Gbps+ capable DOCSIS 3.1 platform yesterday reached 6.8 million premises (here).

Otherwise we note that VM’s mobile base continues to grow, while their phone and video (TV) customers are still in decline. The latter will be a particular concern for VM, which has long prided itself on offering a premium TV service, but these days there’s a lot more competition from cheaper streaming providers (Amazon, Netflix, NOW TV etc.).

Quarterly UK Customer Figures for Q3 2020
5,365,400 Internet – (up from 5,318,400 in Q2 2020)
4,489,800 Phone / VoIP – (down from 4,553,800)
3,349,600 Mobile – (up from 3,268,100)
3,525,500 Video / TV – (down from 3,589,300)

As usual the results also included an update on the pace of their Project Lightning network roll-out, 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. Overall they added 125,000 extra premises to their UK network coverage (up from 93K in the previous quarter) and this makes for a total of 2.4 million UK premises since 2015/16.

As it stands Virgin Media has civil engineering contracts that will see their build continue for the next few years and they clearly have big ambitions for the future.

Project Lightning Rollout Since 2017
Q3 2020 = 125,000 Premises
Q2 2020 = 93,000 Premises (impacted by COVID-19)
Q1 2020 = 93,000 Premises (some impact from 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: Virgin’s UK network now covers a total of 15,191,700 UK homes passed.

The previous cost per premises estimate for their network expansion was c.£620 and they’ve been achieving a respectable 30-35% penetration after 3 years. Meanwhile today’s results add that VM’s focus on optimising build cost has led to a gradual reduction in their cost per premises, which now sits at approximately £605 in Q3, “with scope for this to fall further.”

On the financial front Virgin Media reported total quarterly revenue of £1,291.4m (up from £1,234.2m in the previous quarter), although the full impact of COVID-19 is not yet known. We should add that this figure includes their Ireland operations as they don’t include a split for the UK.

Lutz Schüler, CEO of Virgin Media, said:

“Our relentless focus on keeping the country connected and supporting our customers with a great service is really shown in these results.

We’ve seen improved NPS, reduced churn, increased converged bundle take up and delivered our best customer additions since Q3 2017, underpinned by an 860% increase in broadband additions compared to the same quarter last year. We’ve solidified our position as the UK’s largest gigabit broadband provider with almost half of our network now delivering these next-generation speeds, all while investing to connect new areas of the country to our network.

The increased demand from businesses for fast, reliable connectivity and high-capacity services has fuelled our B2B momentum with an expanding customer base and revenue growth which was particularly strong in our Wholesale division following recent contract wins.

This sustained progress has helped to drive positive revenue growth and improved earnings as we navigate through the turbulence of the coronavirus pandemic. We remain focused and fired-up for the rest of the year and will keep pushing ahead to deliver.”

The latest results also include an official update on their launch plans for the new TV 360 platform, which they claim is “expected to be launched in the U.K. market during Q4” (i.e. before Christmas). “Our new platform allows customers to access TV entertainment across multiple screens through our 4K-ready Virgin TV 360 set-top box and on-the-move with our Virgin TV Anywhere app. Enhanced features such as voice search and control, an updated user-interface and the ability to create individual profiles enabling personalisation are expected to drive significant improvements,” said the operator.

Aside from that there isn’t much else to report, although Virgin Media do claim to be making progress with respect to their O2 merger and they now expect a mid-2021 completion. Likewise there were no updates on their long-stalled IPv6 rollout or the proposed plans for establishing a new alternative network (Liberty Networks) in the UK, which could potentially serve rural premises (with FTTP) – beyond VM’s existing network area (here) – and may even offer wholesale access to rival ISPs (here).

 

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
Leave a Comment
8 Responses
  1. Avatar Gilbert says:

    Thanks you’ve reminded me to switch my mobile away after Xmas – O2 is rubbish around here and I wouldn’t put up with it even if it was free.

    1. Avatar Aqx says:

      Virgin is still using EE & hasn’t made any announcements that they’ll be switching to O2 but instead announces they’ll be working with Vodafone. The merger hasn’t even went through and probably it won’t for a while.

  2. Avatar James says:

    I really don’t like the fact that they are moving away from TiVo to their own software solution which from early reports doesn’t seem to work as well.

    I understand it is all about saving money but it will be a much worse experience for many.

    1. Avatar Spurple says:

      Tivo is not a compelling experience. They are simply taking control of a key part of their platform. As Sky has demonstrated with the Sky Q platform, owning the software gives you advantages as you can focus your priorities on features that are relevant for your users. The competition today isn’t just Sky, but all smart tv and streaming platforms.

  3. Avatar Brien Lancaster says:

    Doesn’t tell you how many dissatisfied customers left Virgin Media at the same time.

    1. Avatar Spurple says:

      If they added users, it must mean that they gained more than they lost, so net happiness levels must be positive.

  4. Avatar Karl says:

    So what exactly is the plan…
    Hear merger with O2 then I hear virgin have a 5 year deal with Vodafone from end of 2021
    Then we hear merger getting closer with O2

    Virgin mobile is great with EE… Vodafone is so bad around me the internet is like going back WAP and we have a Vodafone head quarters in my town .

    1. Avatar Ian Tommins says:

      The Vodafone switch was announced before the O2 merger. I haven’t seen anything official since the merger talks were announced, but I’d assume they will activate an exit clause in the Vodafone contract and stick with EE until they can move to the O2 network.

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