{"id":23034,"date":"2020-08-04T07:42:51","date_gmt":"2020-08-04T06:42:51","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=23034"},"modified":"2020-08-04T09:20:27","modified_gmt":"2020-08-04T08:20:27","slug":"virgin-media-uk-records-strong-quarterly-broadband-growth","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2020\/08\/virgin-media-uk-records-strong-quarterly-broadband-growth.html","title":{"rendered":"Virgin Media Records Strong Quarterly UK Broadband Growth"},"content":{"rendered":"

Broadband and TV provider Virgin Media<\/a> (Liberty Global) has today published their Q2 2020 results, which saw them add +39,200 new UK internet customers in the quarter (up from +8,200 last quarter) to total 5,318,400. At the same time their network coverage grew by 93,000 premises (unchanged).<\/p>\n

At this point it’s probably fair to say that VM have had an extremely busy quarter. The biggest development, by far, has been the agreement to merge with mobile operator O2<\/a> (here<\/a>) and they’ve separately decided to shut all of their remaining outlets on the high street (here<\/a>). On top of that they’ve also made their 516Mbps plan more widely available and will upgrade their Ultimate Oomph TV bundle to 600Mbps<\/strong> (here<\/a>).<\/p>\n

Elsewhere the operator has worked with Cisco to deploy OpenRoaming<\/strong> WiFi<\/a> technology in part of London (here<\/a>), started to roll-out Remote Phy<\/strong> (R-PHY) to boost network performance (here<\/a>) and then there’s the on-going deployment of their DOCSIS<\/a> 3.1 (Gig1Fibre<\/strong>) network upgrade, which pushes top download speeds to 1Gbps and today went live across Leeds, Bradford and Glasgow (here<\/a>); with many more D3.1 areas to follow.<\/p>\n

In theory these results, which run to the end of June, should have been the one worst affected by COVID-19 but instead Virgin Media<\/a>’s sudden growth in broadband subscribers suggests that they’ve benefited as home workers went looking for better connectivity during lockdown. After all, in many urban areas Virgin Media<\/a> is still the fastest widely available provider.<\/p>\n

On the flip side we note that their phone and TV \/ video customer base is continuing to 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<\/a>, Netflix, NOW TV<\/a> etc.).<\/p>\n

VM UK Customer Figures for Q2 2020<\/strong><\/span>
\n5,318,400 Internet – (up from 5,279,200 in Q1 2020)
\n4,553,800 Phone \/ VoIP – (down from 4,579,100)
\n3,268,100 Mobile – (up from 3,220,400)
\n3,589,300 Video \/ TV – (down from 3,621,800)<\/p><\/blockquote>\n

As usual the results also included an update on the pace of their Project Lightning<\/strong> network expansion, which originally aimed to add 4 million extra premises by the end of 2020 (2 million via FTTP<\/a>) but is now expected to take much longer. Overall they added 93,000 extra premises to their UK network coverage (unchanged from 93K in the previous quarter) and this makes for a total of 2.3 million UK premises since 2015\/16.<\/p>\n

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 the COVID-19 crisis will have had an impact here, even though they did continue with their deployment.<\/p>\n

Project Lightning Rollout Since 2017<\/strong><\/span>
\nQ2 2020 = 93,000 Premises (impacted by COVID-19)
\nQ1 2020 = 93,000 Premises (some impact from COVID-19)
\nQ4 2019 = 154,000 Premises
\nQ3 2019 = 119,000 Premises
\nQ2 2019 = 130,000 Premises
\nQ1 2019 = 102,000 Premises
\nQ4 2018 = 144,000 Premises
\nQ3 2018 = 109,000 Premises
\nQ2 2018 = 118,000 Premises
\nQ1 2018 = 111,000 Premises (likely impacted by heavy snow)
\nQ4 2017 = 159,000 Premises
\nQ3 2017 = 147,000 Premises
\nQ2 2017 = 127,000 Premises
\nQ1 2017 = 102,000 Premises<\/p>\n

NOTE:<\/strong> The previous cost per premises estimate was c.\u00a3620 and they’re achieving 30-35% penetration after 3 years. Virgin\u2019s UK network currently covers a total of 15,072,600 UK homes passed.<\/p><\/blockquote>\n

On the financial front Virgin Media reported total quarterly revenue of \u00a31,234.2m (down from \u00a31,266.3m in the previous quarter), although the full impact of COVID-19 is not yet known.<\/p>\n

Lutz Sch\u00fcler, CEO of Virgin Media, said:<\/strong><\/p>\n

“This will certainly be a quarter that none of us will forget and Virgin Media has performed well. The endless dedication of our teams to keep our customers and the country connected at this important time is something I\u2019m very proud of. It reaffirms our mission to become a national connectivity champion that is committed to helping Britain boom once again.<\/p>\n

Despite the challenges of Covid, we kept pushing forward to adapt as a business and give our customers more; this included creating more than 1000 UK customer service roles. These efforts, and the essential role of our services, are really clear in these results. We\u2019ve seen the best Q2 cable additions since 2016 and record mobile contract subscriber growth for the quarter, alongside positive improvements in customer satisfaction with increases in network use and TV viewing.<\/p>\n

Financially, we have continued to grow Operating Free Cash Flow but clearly factors such as the suspension of live sport and a reduction in handset sales due to COVID have slightly dampened revenue. These factors had a negligible impact on margins due to associated cost savings.<\/p>\n

This was all coupled with continued investment to bring next-generation speeds to more of our network and expand our footprint to new areas of the country. Virgin Media now has the UK\u2019s largest gigabit network as we switch on these speeds in more locations, and 2.3 million premises are now able to take Virgin Media services when they couldn\u2019t just a few years ago. The Government is clear that it wants shovel-ready projects to help level-up the economy – the truth is Virgin Media has never put its shovel down and will keep pushing forward to play our role in these tough times.<\/p>\n

We enter the second half of the year with our head held high. Despite there being uncertainty as we ease out of lockdown, we are focused on where we\u2019re heading. We\u2019ll keep delivering for our customers and making sure the country has the connectivity it needs and deserves.”<\/p><\/blockquote>\n

Meanwhile a question remark remains over Liberty Global’s previous hints about the possibility of establishing a new alternative network (Liberty Networks<\/strong>) in the UK, which could potentially serve the country’s other 10 million premises (with FTTP<\/a>) – beyond VM’s existing network area (here<\/a>) – and may even offer wholesale access to rival ISPs (here<\/a>).<\/p>\n

We suspect that the O2<\/a> merger may be taking priority over any plans for wholesale or a network split, but if they’re serious about all this then they’ll ideally need to do something before the Government (BDUK) begins procurement for their \u00a35bn gigabit programme in January 2021. However, much may depend upon whether a major ISP, such as Sky Broadband<\/a>, is willing to support this.<\/p>\n

Likewise, we’re equally curious about VM’s planned deployment of IPv6, which last year appeared to be sent back to the drawing board (here<\/a>) and we haven’t heard anything new since then.<\/p>\n

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