Some of Virgin Media and O2’s UK broadband and mobile customers have, in recent weeks, reported having noticed a few changes to the combined operator’s “Volt” bundles, which appears to have quietly resulted in some significant feature downgrades (slower internet speeds, fewer extras etc.) and higher prices.
The main example of this that keeps popping up in our inbox is their top “Ultimate Volt” bundle (previously known as “Oomph“), which until recently charged £85 per month on an 18-month term for a 1Gbps broadband service (inc. router), anytime calls to UK landlines and mobiles, an O2 mobile SIM with unlimited usage (data, texts and calls), a premium Pay TV service and various other features.
However, a few weeks ago the package was quietly renamed to the “Mega Volt” bundle, and not long after that some of the operator’s customers began reporting that Virgin Media had dropped the broadband speeds to 516Mbps (you can still add 1Gbps for an extra £6 per month), removed the included TNT Sports content (previously BTSport – now an extra £18 per month) and were no longer including an extra 360 Mini TV box (if you want that, it’s an extra £10 per month).
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The change doesn’t immediately impact existing customers, but new customers can obviously no longer take the original bundle, while those seeking to re-contract or change their package in the future might eventually find it harder and more expensive to get the same sort of deal as they had before.
A Virgin Media spokesperson told ISPreview:
“We are simplifying our broadband and TV packages to make it easier for customers to find a great-value plan that suits their needs. Existing customers will not see their package change as a result of these bundle updates unless they make a change to their services and agree a new deal with us. Should existing customers want to alter their package, we’re happy to review their options to ensure they can enjoy a great-value plan that suits their needs.”
The ISP claims that, as well as beating a comparable package from Sky (Sky Broadband), customers still “get great value” from the package, including an unlimited O2 SIM, O2 Travel, Sky Sports and Sky Cinema in HD and their latest WiFi guarantee “at no extra cost“.
Virgin also notes that the bundled O2 SIM allows customers to take O2 Extra at no additional cost for up to six months (e.g. Disney+, Amazon Prime, Audible, Cafeyn, Amazon Music Unlimited, McAfee Mobile Security Plus or O2’s International Bolt On) – this saves money (e.g. Amazon Prime is usually £8.99 per month), provided any of that is of interest.
On the TNT point, VMO2 again said it was to do with “simplifying” their packages so customers can choose whether they want to add sport channels or not. But the standard price of re-adding that will still be £18, although Virgin said their customer service team will be happy to discuss options and offers with existing customers who would like to change their package, but keep TNT Sports.
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However, we should point out that Virgin Media frequently run special offers on their bundles, and we have it on good authority that their Mega Volt Bundle may soon be sold alongside a 1Gbps speed again (expected early next week). But this will only be for a short flash sale, rather than as a standard feature of the package.
Well my parents will definitely not be renewing with them now.
The value of the ultimate volt bundle was literally the only reason they went with them and might have recontracted with them.
My parents would otherwise rather go back to Sky.
I’ll say it. “simplifying our packages* is code for “attempting to increase our ARPU”.
As a business that’s what they want to do, and indeed need to do. VM’s cable customers contribute very modestly to VMO2’s net profit, and when looked at as ROCE (roughly speaking what you earn as a company divided by the money you’ve invested to get it), the cable customers contribute nothing. All the value in VMO2 comes from the O2 side.
VM have spent years outsourcing and offshoring customer service and support, so they can’t cut costs any further, and therefore to improve their miserable broadband performance they need to put prices up. The coordinated approach of large companies to impose RPI+ mid-contract increases has been another blessing for VM, clearly that’s not enough hence this change. The extent to which VM customers accept these changes won’t be known for a while yet, but this being Britain I’m sure the majority will moan but do nothing else.
Andrew,
You only need to look at VMs financial results before the o2 merger to realise that’s absolute rubbish. They were earning a fortune then, and they probably still earn a fortune
The problem is Steve that you don’t understand what you’re looking at. It is a matter of fact that Virgin Media have made net losses under GAAP for many years, with the odd miserly profit, and that mediocre performance is also why parent company Liberty Global has NEVER paid a dividend. You say VM made profits, but that’s all smoke and mirrors accounting and if you understood what I was saying about ROCE I wouldn’t need to explain it.
If you work out the ROCE for VMO2 for full year 2022, then you’ll find it’s about 0.9%. Their cost of capital was about 8.5%, meaning that they failed to cover that cost. This has been the case for years, and means value is being destroyed. That’s absolutely the case, and is still the case at the levels of profit they report.
Let me offer a vastly simplified example of this: You go into business, you buy a garage with £50k of your own savings, and a loan of £10k. During your first year of business you conduct one sale: You buy a car for £5k, and sell it to me for £10k. That gives you a gross profit of £5k. If your overheads were £2k, and your interest on the loan was £1k, then your net profit was £2k – a 20% net margin, which is really rather good. You’re profitable, what more could you want? Well, there’s that £50k of your own money. In the bank it could have earned £2.5k, invested in a tracker fund it might have earned £5k. But that’s not on your P&L. If we factored in your cost of capital (interest on the loan, interest or earnings foregone on the £50k, and a risk premium) then your cost of capital would be greater than your return on capital. So although you may have booked a correct and legal profit, you’re still worse off than you were in the first place.
It’s somewhat more complicated than that example, but it’d take too long to do the full analysis of VM’s accounts prior to the merger. Since I’ve got an MBA from one of the country’s top business schools, and did my master’s dissertation on financial performance measurement, and worked in business strategy for a number of major UK companies, I’ve got a very good idea of what I’m talking about.
Andrew G, those is the kind of nonsense accounting that is destroying our country.
You simply ignore that you still have a £50k garage, and that the garage enabled you to return a £2k profit.
So, you didn’t make £2.5k or £5k you could’ve done via those other investment types, but you still made a profit, and still own the asset.
Andrew’s fresh out of uni, Bless
Localzuk: “So, you didn’t make £2.5k or £5k you could’ve done via those other investment types, but you still made a profit, and still own the asset.”
And again you miss the point, which was that in the example Steve has lost money compared to his other options. For a trading business, making a profit isn’t enough, owning the assets isn’t enough, it needs to make more than its cost of capital otherwise it’s investors would be better advised to put their money in a savings account.
However, since this is falling on the deafest of ears, let’s just look at parent company Liberty Global plc’s accounts as filed with Companies House, prior to the O2 merger:
Profit/Loss from continuing operations after tax:
2013, $882m loss
2014, $981m loss
2015, $1,049m loss
2016, $208m loss
2017, $644m loss
2018, $1,158 profit
2019, $731m profit
2020, $1,594m loss
So there you have it, VM’s parent company made a cumulative loss from operations of $3.5bn between 2013 and 2020. And their capital employed to achieve that loss was around $40bn.
VM makes no money overall, and even in the few years when it does, that is less than the capital employed would have earned in a savings account. So my original point is correct – VM lose money, they destroy shareholder value, and the profits of VMO2 come almost entirely from the O2 operations.
I would not go back on virgin, they add things you pay more but they don’t tell you when you find out they won’t take the charge off.i had two virgin contract phones and TV, found out I was being charged 6£ for a sim there customer service leaves a lot to be desired
Shame I cant comment on the post later down.
One can’t look at a profit posted by a company to see how well it’s doing.
You can borrow nearly 50k against an asset of 50k. So the actual yearly “Cost” of that asset wasnt 50k but just what the fee’s and interest came to as a total (It’s not quite like that but let us not overcomplicate things).
So if VM was able to put down say a 5% deposit and borrow the 45k then they were only in it (the 50k purchase) for 2.5k – so their “loss” is only what the earnings could have been on that 2.5k plus the actual cost of the loan minus the equity of the loan minus the profit from that asset.
Virgin Media are not making a loss on their customers – Creative maths might make it seem this way for tax, regulatory reasons, and as a reason to validate price increases – but they are not making a loss.
This got my attention.
“The coordinated approach of large companies to impose RPI+ mid-contract increases has been another blessing for VM, ”
If this really is coordinated, doesnt it fall under A WORD I CANNOT REMEMBER UUURGH, there is a word for it where its illegal for competitors to work together to worsen market conditions. As an example recently memory manufacturers were found guilty of rising prices all at the same time as each other without an increased in costs to justify it.
I really admire those paying for this.
I wonder if this is in anticipation of further juggling to add an even faster tier.
Well, If BT do come out with this 1.2/1.8Gbps early 2024 then you know VM will come out with 2Gbps + to keep up the willy waving.
with 150mbit upload bahahah.
virgin are being left behind, and that’s a good thing. they’ll have to up their game but seems like they’re doubling down on the stupid.
150 for now yes.. But FTTP routers are synced at 1000/1000 so I am sure that’s a flick of a switch at BT’s end. They don’t want to eat the LL revenue and I get that – but at some point they are going to have to keep up with VM
No sign of the extra capacity that’d be needed to provide 2 Gbps on the cable network right now.
No chance of an upload increase with it any time soon either.
Anytime a company uses that word simplify it always translates to screw their customers out of more money or lower the offering. Just the same way as in supermarkets the brands simplify their products by making you get less for the same money. They think we’re stupid.
And like when eBay ‘simplified’ their fees by removing different percentage fees on categories (most of which were 5% or less) and made it a blanket 10%.
Since my mobile has changed from virgin to 02 i.v had numerous problems and the whole internet is slower.yet you put the prices up I’m only a pensioner and use the net and mobile to keep in touch with family who live long distances away. Not happy i.ve been a customer for years and my husband before me.
If you have good EE coverage 1P mobile is hard to beat.
You get stuck in a trap with Virgin, I use them with the added O2 sim and 500 speed, I keep trying to leave but in my area no other company can come near their speeds or price, their customer service is a joke but they do have a good product. I was looking to leave them this easter but honestly can’t find anything near them so I will most likely stay with them.
No BT or AltNet FTTP in your area?
5G or 4G home broadband is the way to go as you can plug and play ect.
Same here. Live in a city center yet Virgin is the only supplier for the area. It’s a wildly expensive trap.
Same problem on my street which is technically Central London.
Same trap here, despite the internet giving impression FTTP no go areas are only rural, am in a city VM area with VM the only provider offering speeds above 80mbit.
Openreach have no interest at all, its not even planned.
Luckily I am on a cheap price though, the question will be if I can renew on same terms next year.
Also to be fair the service I consider very good as well, no PPPoE nonsense, and not almost daily outages like many DSL providers seemed to love doing during the night.
I won’t be renewing. O2 is terrible where I am and desperate to leave the service.
With these reductions in service and other fibre operators now installing alternative service I can see virgin really struggling in future whereas previously they’ve had the monopoly.
When it was birmingham cable telewest blueyonder its was ok since greedy virgin came along its terrible I get one call a year from someone I can’t understand telling me I’m one of there best customers (how can we make you part with more money today) I hang up
The irony being that if you don’t renew you ARE parting with more money!
One thing to take notice of is should you do any changes to your bundle.
I tried the 3 months free of the UHD channels.
When I tried to cancel before the end of the trial the only way was to telephone.
After successfully cancelling I was given the sphell of my new package.
I said that I wasn’t changing my package, one unhappy bunny at the other end as they wouldn’t get a commission bonus for a new package.
But the problem was the package change.
Worst thing ever from VMobile to O2, (now with EE for mobile).
The loss of speed for what they claimed was more value.
Now back on my original package for a discounted 12 months.
Top BB speed and the channels I want not the ones they tell you to have.
Wait till its coming up for renewal then banter
i used to work for vm. the bonus/commission comes from recontracts and not the amount you spend
Well we’ve had the virgin media letter announcing the 3.9% plus rpi increase and have been given to 31.10.23 to cancel without termination costs being involved.
Spoke an alt net provider who said their network will be live in mid November. Hopefully the timescale doesnt slip – but have 5G backup available if it does.
I just reconstructed my Virgin Volt Bundle,
I still have 1Gb Broadband and TNT Sports,
this was before this announcement though
Could be worse. Imagine paying £690 a month for a 1Gbps leased line with BT and they sending the same letter but with a 15% increase. That’s what happened to my old boss. He managed to persuade them to keep the price locked for the rest of his 5 year contract and then he left for someone cheaper.
Even when you pay through the nose they STILL hit you with price rises!
We are being taken for mugs by all the providers. Basically they have a captive audience due to our reliance on mobile networks and broadband to get anything done. Prices will just keep going up, quality and coverage will hardly improve despite the promises. New smaller cheaper providers will be swallowed up by the big boys to keep prices higher. 5G providers are degrading their signal in many areas because their networks cannot handle the data traffic and apparently 6G is on the horizon. In all honesty I cannot see things improving.
If you can avoid VM, for goodness sake do so. At least read the reviews and comments on FB and Trustpilot.
Customer service levels are abysmal.
Advertised speeds, the ones you are paying for, in reality are rarer than rocs eggs, unless you use the VM speed checker.
This is not true. If you have a relatively good connection, like myself, the speeds are as expected.
Yes, thier customer services is terrible.
I have limited options, FTTC is about 46/6, no FTTP option.
So that leaves VM, speeds have been great, no issues there and I’ve been with them for 5 years.
Telephone support is useless, you have to use the forums.
Price increased are a frustration, resulting in giving notice to eventually get a better price, which now we can only do at end of contract.
I believe we do have 5G now, so some experiments might be in order.
My brother’s just signed up to Community Fibre 1Gig up and down, for £25 a month, although it is CGNAT, but there’s ways around that.
I received an upgrade to the 1Gbps service along with a new router that I never asked for but as it was at no increase in price I’ve connected up to it …. have to say I’m less than impressed as my TV’s wireless connection has droppre arom around 105-115 Mbps to 55 and my phone’s dropped from well over 200 to around 55…. wireless internet connection upstairs is still horrendously patchy so no improvement there either
Sounds like your devices are connecting via 2.4ghz rather than 5ghz WiFi signal.
@Peter – I’d double check which band the devices are connecting to. 2.4ghz is further in range but slower, if the 5ghz band has relatively same signal levels it’s faster. 5ghz signal bands being bad in certain cases can be worse than 2.4ghz. It’s about trial and error.
Why did Virgin merge with O2, complete downgrade, 02 customer service sucks as-s.
They merged because O2’s parent company Telefonica had lost interest in the UK, and hadn’t been able to agree an outright sale of O2 at an acceptable price for several years. The plan of the merger as publicly reported was to load up VMO2 with extra debt after the merger, and Telefonica then got a £2.5bn “equalisation” payment and a £5.7 billion recapitalisation adjustment. So Telefonica ended up with £8.2bn in cash but still had 50% of the merged VMO2.
Liberty Global, owner of VM got a £1.4 billion recapitalisation adjustment, plus the other 50% of VMO2. Their rationale was that they’d run out of growth ideas and options for VM as was – the Project Lightning network extension had been a hugely expensive failure, because net customer numbers barely changed despite billions in capital expenditure, and ARPU had remained stuck at about £49 for about five years despite VM’s aggressive sales tactics and inflation busting price rises. There’s also the problem that VM didn’t make any real money – add up the net profit of Liberty Global plc since say 2014 and the result is embarrassingly poor (ICBA to do it again I’m afraid, I’ve done it in the past, but Companies House provide the numbers if you wish to look).
What will also be apparent from the money transferred to the two parent companies is that O2 was a far more valuable asset than VM, to the tune of £6.4bn. I think Telefonica took the best and only offer on the table to minimise exposure to the UK market and get a good dollop of cash back, if VMO2 pay any dividends or can be sold on for a profit that’s merely a bonus. Liberty Global meanwhile had persuaded themselves that they can sack enough O2 staff and cut enough costs to become magically more profitable than the raw VM+O2 calculation. We’ll see in a year of two how that pans out, but the managing party here are primarily VM (NTL as was) and they’ve always been a dreadfully managed company. In a world where VM’s single advantage was higher speeds, they could get away in the market with being poor. Now with the growth of OR FTTP and altnets, there’s plenty of people able to offer higher speeds than most customers need. So VM’s hopes to either build the customer base by cross selling to O2 customers, or to ramp prices for existing VM customers may not be plain sailing.
Interesting reply Andrew.
Will add my own.
First of course for many of us VM are the saviour, as bad as their service has been in the past, they are e.g. the only ultrafast provider at my address and for big parts of my City. Openreach have simply shown no interest whatsoever despite it being very densely populated and urban, and CF whilst doing a rollout, it has to be one of the slowest rollouts I have ever seen, took them 3 years to do the works required on my street when it already had fibre under the ground, and has now been stuck at getting close to 4 months on “done but no ISPs, coming soon”.
Now the interesting part.
I rejoined VM about a year ago. The prices werent great, (although still good compared to VDSL).
Then I was offered if I agreed to get an O” sim, they would massively discount the gig1 package, the discount was huge, less than 50% price. Just for taking a £12 a month O2 sim.
I noted at the time there was a clear strategy to push customers on to O2 at the expense of VM’s margins, with your revelations, thats VM seemingly has poor value due to low financial performance, what I noted now makes sense.
Right now the O2 sim is in a phone but inbound calls only (previously giffgaff), so they getting £12 a month for nothing really, pretty much 100% margin.
Also your post about the debt load (which obviously incurs a interest cost) and the failed project lightning goes some way to explaining their massive push to drive revenues up per customers, basically to pay for these decisions, and the fact they have hit saturation on customer count.
Even on the lower end of the scale I get 50 and they seem to turn it off through the night, not great
wifi isn’t a guaranteed speed of any kind unless using their wifi guarantee which is 30Mb guarantee.
wonder if they will still do the 500 to 1gb upgrade, all we want it for, and were in the new area, be a shame to lose out just because were on a free trial >.<
Aren’t you on XGSPON? Can’t get TV so be interesting to see what ‘bundles’ they offer someone that can only get broadband and mobile.
I contacted vm after my package offer finished and went from £78 to £159 I could not afford the increase after twenty four hours on chat I decided to cancel my contract only to find that my final bill would be £915 how is that fare after more than twenty years with them
Speak to Citizens Advice, it may be possible to get that £915 bill revoked, but it will depend on when you attempted to cancel, and even then you’ll likely need to involve the Ombudsman.
I’ve got a few properties that have ultimate oomph in.
Two of them I’m paying £43 and then a £5 o2 sim as O2 data is no good in Hove. Got a 3rd houses that I’ve just given my 30 days notice on to trigger the retentions call back.
I will see if they are still going to offer the ultimate package for existing customers. I will update this post in a few days. My goal is to get the ultimate oomph for less than £50 per month like my other two
Keep us updated. Mine has a year to run but interested what they will offer.
Managed to get it down to £51 but they said I had to keep the unlimited o2 sim so £81 in total for everything just HD sky sports not UHD 2 tv boxes talk anytime 1gb hub 5 3 boosters and Netflix standard..
Feel gutted I’ve got it £8 cheaper at my other home
Did this include TNT sports? Still not a bad deal if it does.
This is good new. VM is full the brim of people paying £85 a month for this and it’s simply not cost effective.
If you want Sports then you’ll have to pay for it. It isn’t up to broadband only customers to pay over inflated bills because people want all the sport they can get on two screens for next to no profit.
They were selling it for £79 not long ago which probably didn’t make them any money, and very few people are willing to pay £140 on one bill. Unfortunately triple/quad play made sense and now it just looks like one huge chunk of money each month vs Netflix.
Also VM are an awful company and their TV is just awful in every way.
I got Volt. Supposedly got the speed upgrade and even got a wifi booster.
And still the wifi signal keeps failing…
Not even sure if the o2 phone data outside Europe perk is still valid, as not listed anymore
Recently renewed with VM as my contract was coming to an end. Like others there was no real alternative as sky and BT have poor broadband speeds in my area and always turn out significantly more expensive when adding sports channels which I watch.
After being given the run around for what felt like an eternity I was put though to the cancellation department (seems like just the UK based call centre). Was offered the 1GB with new TIVO box and basically all the channels they offer for £70 if I have an O2 sim. I wasn’t an O2 customer but was told by the person on the phone to just take out the cheapest monthly O2 sim and the offer is yours!
Overall fairly happy with the service but I never get anywhere near 1GB speeds more like 300- 500mb.
Seems like the “Oomph“ is always the feeling you get when they increase you’re monthly bill but decrease what you get too. Virgin really struggles to understand it’d probably break even if it wasn’t so afflicted by corporate greed. Even then, it still never makes any profits. Still, you can bet the board do really well out of it annually.
I have not commented before but the truth is not always a flavour virgin care for or practice
It’s also on other sites as I am sure you know with a link to here.. Seems when I a local area it shows 1 Sports channel and 1 Cinema and also the unlimited sim. maybe this is in response to the media saying there is no sim or 230 channels or Netflix etc (also back) ?
It’s nice to see pressure from the Media do wonders if so.
https://ibb.co/P9DCsRL
Also they are keen to give away 16 bottles of cheap nasty stuff OR £150 bill credit – band aid?