Virgin Media O2 Bring 1Gb Broadband to 16 Million UK Premises
The latest Q4 2022 results from UK ISP and mobile operator VMO2 (Virgin Media and O2) has seen their broadband base reach 5.653m customers (up by 22.7k in Q4 vs 19.1k in Q3), while their gigabit coverage added another 188,000 premises in the quarter to total 16.14 million (54% of the UK). Now comes Nexfibre.
In case anybody has forgotten, Virgin Media’s most recent target for their long-running fixed-line network expansion – Project Lighting – was to cover 16 million premises by the end 2022, and they’ve successfully achieved that by expanding their coverage to a total of 519,000 premises during the course of last year (virtually all of this via FTTP – mix of RFoG and XGS-PON). In total, Project Lightning added 3.2m premises and is now largely completed.
The operator’s civil engineering teams are now switching their build focus toward the new wholesale Joint Venture company – Nexfibre, which is backed by Telefónica, Liberty Global and InfraVia Capital Partners. This is the reason why Virgin’s own build actually picked up during Q4, instead of slowing down as Project Lightning completes.
In fact, the 188,000 premises passed in Q4 included 24,000 premises that “were subsequently transferred to the new fibre joint venture, nexfibre“. Virgin Media (VMO2) is acting as the anchor tenant ISP for this joint venture and will provide build services to nexfibre. The company aspires to cover “up to” 7 million additional UK homes (here) – staring with 5 million by 2026 (i.e. those homes not currently served by VMO2). The latest release reaffirms this by saying that it will expand VMO2’s footprint to 80% of the UK.
The catch is that Nexfibre has, thus far, not been able to announce any wholesale agreements with other ISPs. We should point out that Virgin Media’s own fixed line network is not yet available to wholesale, although they are prepared to do that at some point, and we very much expect they will. But they may want to get more of their XGS-PON (FTTP) upgrade programme in Hybrid Fibre Coax (HFC) areas completed first (here).
Project Lightning Rollout Since 2017
Q4 2022 = 188,000 Premises
Q3 2022 = 115,000 Premises
Q2 2022 = 114,000 Premises
Q1 2022 = 101,000 Premises
Q4 2021 = 93,000 Premises
Q3 2021 = 67,000 Premises
Q2 2021 = 89,000 Premises
Q1 2021 = 80,000 Premises (impacted by COVID-19 lockdown)
Q4 2020 = 115,000 Premises (some impact from COVID-19)
Q3 2020 = 125,000 Premises
Q2 2020 = 93,000 Premises (impacted by COVID-19 lockdown)
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 PremisesNOTE 1: Between Q1 2017 and Q4 2018 Virgin added 1,017,000 premises under Project Lightning, which is an average of 127,125 per quarter.
In Mobile, the operator has expanded 5G connectivity to more than 1,600 towns and cities, as well as boosting 4G capacity in 725,000 postcodes during 2022. “We are set to deliver 5G services to 50 per cent of the UK population in 2023,” said the release. But rivals EE and Three UK achieved that figure almost a year ago.
The operator also completed the move of all Virgin Mobile traffic to O2, although their customer plan migrations to O2 are due to start in March 2023 and complete later this year.
Quarterly UK Customer (Connection) Figures – Q4 2022
5,653,800 Fixed Broadband – (up from 5,631,100 in Q3)
44,650,000 Mobile inc. Wholesale – (up from 44,155,100)
Elsewhere, VMO2 announced a multi-million-pound investment that will see the creation of a new HQ based in Paddington from the end of 2024, following the closure of their Hammersmith office. The operator will also be closing their Slough office, with employees able to work from their existing major site in Reading instead, which opened in 2019. The company is not looking to make any reduction in headcount as a result of the Slough office closure, which is planned to take place in June 2023.
On the financial front, VMO2 reported total transaction adjusted revenue of £2,731.8m in Q4 2022, which is up from £2,583.2m last quarter.
Lutz Schüler, CEO of Virgin Media O2, said:
“In our first full year as Virgin Media O2, we reinforced our position as the biggest challenger in the market. We delivered a strong performance against our guidance, took big steps forward in our integration plans, hit our synergy targets, and showed the commercial momentum of our merged business despite a challenging macroeconomic backdrop.
We invested £2.1 billion in 2022 to deliver even more for our customers while bringing gigabit speeds and 5G to new parts of the country, with plans to accelerate the rollout this year – providing more choice and enhancing competition like never before. This investment, combined with continued innovation and our unwavering customer-first approach, delivered an increase in our fixed and mobile contract bases, as well as driving convergence with 1.3 million people now taking one of our Volt bundles.
We have firm foundations in place, a clear strategy and a team that’s focused on building long-term commercial momentum and I’m confident we’ll deliver our 2023 guidance.”
In consumer, VMO2’s flagship converged Volt bundles have also continued to perform well with 1.3 million customers now taking the products in a little over one year since the original launch. Virgin also saw an increase in average speeds across the broadband base of 41% year-on-year to 301Mbps, which was partly driven by some recent speed boosts to their slower tiers.
Once again there were no updates on their Project Mustang progress, which is upgrading the 14.3 million UK premises covered by their old HFC infrastructure to the latest 10Gbps capable XGS-PON full fibre (FTTP) technology by 2028 (here and here) – at a cost of c.£100 per home. A huge amount of engineering is currently taking place for this, but VMO2 won’t announce new products until they’ve completed a big enough portion of it.
Virgin Media also has the “option” to separately wholesale out access to their existing fixed network of 16 million premises, but they haven’t announced a decision on that yet. Securing support from other ISPs for this is key to its success, but that requires tricky negotiations (issues over exclusivity etc.) and implementation can be both costly and complex for providers. TalkTalk, Vodafone and Sky Broadband are likely targets.
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 X (Twitter), Mastodon, Facebook and Linkedin.
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Are they building full fibre like open reach , community fibre or they still using cables ?
It’s FTTP XGS-PON now.
Thank you.
So it’s not full fibre. They still using coax cable ?
FTTP = Fibre to the property – definitely full fibre
They just finished building their network from scratch in my area and offer speeds typical for RFoG/DOCSIS…
PON is passive optical network. Wether the operator runs GPON, XGS-PON or RFoG the network is still future proof.
The various technologies can co-exist on the same fibre, and using RFoG is a somewhat sensible approach in many areas as it allows for internet and TV using much the same kit as in the DOCSIS areas. I imagine virgin will have RFoG and XGS-PON coexisting for a number of years
Technically they still use coax cable but they bring the fibre cable right into the house they call it Radio Frequency Over Glass AKA RFoG. They upgrade the coax cables inside the house but instead HFC it RFoG which technically still uses HFC but very short HFC cables They just the bring the fibre right into your home. We’re connected to Virgin Media type optical network terminal which then converts the signal into coax cable at much higher frequencies.
I’m glad to see the expansion of the fibre network, but not sure on why they want a head office in London. Surely it would be cheaper in some other part of the country.
I remember Telewest had an office on Great Portland Street in London. Will the new office in Green Park in Reading be closed as well?
People from Slough are being moved to Reading, so keeping that open
Virgin Media Ltd. is the cable TV and broadband company based in Reading.
TELEFONICA UK Ltd. is the legal registered company name of O2 UK, the mobile phone division based in Slough.
VMED O2 UK Ltd. is the legal registered company name of Virgin Media O2 based in Hammersmith, London and is the holding company of both Virgin Media Ltd. and Telefonica UK Ltd. trading as Virgin Media and O2 respectively.
So it looks like the staff at the O2 office in Slough are moving into Virgin Media’s operational headquarters in Reading. The holding company for both, Virgin Media O2, will be relocating from Hammersmith to Paddington.
I’m interested to know whether the 80% overall target includes those streets missed out or its just new areas.
Can they reach that number of homes passed just concentrating on new builds.
Perhaps they’ll be an opportunity in some areas where it is financially viable for them to do so, when they upgrade the older DOCSIS parts of the network.
They’ll absolutely be filling in new bits. The fibre overlay makes it more doable and is why, in areas where they’re building the fibre overlay right now, they’re connecting with the Openreach network so much. You see a fair few roadworks where they’re putting duct in and core drilling into Openreach cabinets to connect them.
They’ll reach you using the Openreach ducts and poles if the costs are right, and frankly they probably will be.
Well I’m in an area that was recently completed in 2020 with the new FTTP network from them and missed out. There are Openreach ducts which they could have used but didn’t!
Fast forward to today and I have Openreach, Netomnia and CityFibre on their way within the next few months.
Jack, I know which one I would pick. Netomnia as first choice then if they decide to get too expensive at some point or some other reason, CityFibre with Openreach last in the pickings.
Will they ever be adding 4G to the Underground?
They have already announced that they are doing this.
Update on Virgin Media’s IPv6 rollout:
Nicely summed up. They gave up on DS-Lite even….
“Supercharging the UK”. Right. They can’t even supply broadband to my home (and 6 others on my street) using coax when every other property on my street has VM.
Clearly missing out, presumably for cost reasons, 6 properties on a street absolutely means they can’t build out to anywhere, ever in a nation with 30 million premises, of which they’ve already covered 16 million with an accelerating build rate.
“Overcharging the UK” – the decals on the window panes were printed incorrectly 🙂