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Virgin Media O2 upbeat on 5G and fibre rollout

Buoyed by a pretty solid set of Q1 financials, Virgin Media O2 is talking a good game on network rollout in the UK, both in terms of fibre-to-the-premises and 5G.

Mary Lennighan

May 10, 2023

3 Min Read
VMO2 gigabit van

Buoyed by a pretty solid set of Q1 financials, Virgin Media O2 is talking a good game on network rollout in the UK, both in terms of fibre-to-the-premises and 5G.

The UK cable and mobile player used its first quarter numbers to reiterate its goal of reaching 80% of the country with full fibre in the coming years and to let us know that it is on track to do that. It also noted that it expects to cover half of the country with 5G by the end of this year, which is still behind some of its rivals, but nonetheless that’s good news for O2 customers.

But while VMO2 was excited to share its network evolution goals, it remains frustratingly unforthcoming on actual metrics, particularly in the fibre space.

As of the end of March, the telco claimed 16.3 million homes serviceable, an increase of 107,800 in three months and well over half a million more than at the same date last year. ‘Homes serviceable’ replaces VMO2’s previous homes passed metric and includes homes that can receive a Gigabit service from either VMO2 or a partner network. We don’t know though how many of those homes can access full fibre and how many are still HFC.

However, we do know that the growth is coming from fibre. VMO2 says the new homes serviceable added in Q1 came primarily from nexfibre, the fibre joint venture created by its parent companies Telefonica and Liberty Global, alongside investor InfraVia Capital Partners, last year. VMO2 is the anchor wholesale tenant on that network.

“The upgrade of our existing network to full-fibre remains on-track, and our serviceable FTTH footprint is set to reach up to 23 million homes in 2028,” VMO2 said in its Q1 report.

Virgin Media O2 is not the only one pushing on with full fibre in the UK, of course. Far from it, judging by the latest numbers shared by Point Topic this week.

The analyst firm notes that at the end of Q1 just over 15 million UK premises had FTTP coverage, up from 13 million at the end of last year. That’s a pretty good effort from the country’s fibre builders.

More than 1.6 million of those premises could choose between three independent fibre ISPs, compared with 1 million at end-2022, while 2.5 million had access to two or more, up from 2.1 million. That’s obviously good news from a competition point of view, but little comfort to those living in the rural and remote areas that still lack fibre coverage. But overall, there’s good progress being made here.

Returning to VMO2, the operator had a total of 5.8 million fixed customer relationships – fibre and otherwise – at the end of Q1, almost a quarter of a million more than it claimed a year earlier. However, revenue for that segment fell by 4.8% year-on-year to £958.3 million.

The slide was offset by mobile growth though. Mobile revenues grew by 3.4% to 1.4 billion, helping to push up the operator’s total topline and drive a 2% hike in earnings.

That said, VMO2 reported retail mobile customer net losses of 175,000 during the quarter, but year-on-year its base increased by almost 1.5 million to 34.1 million.

As of the end of March it had reached 50% outdoor population coverage with 5G in 2,100 towns and cities and says it is on track for 50% of the whole country by year-end. It also highlighted the launch of its first 5G services on the London Underground during the quarter and said it will continue rolling out 5G on the Tube this year and next, with the aim of full coverage by the end of 2024.

That will help VMO2 keep its London customers happy, but the telco needs to keep its eye on the ball with regard to broader network development if it wants to attract and retain mobile customers.

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About the Author(s)

Mary Lennighan

Mary has been following developments in the telecoms industry for more than 20 years. She is currently a freelance journalist, having stepped down as editor of Total Telecom in late 2017; her career history also includes three years at CIT Publications (now part of Telegeography) and a stint at Reuters. Mary's key area of focus is on the business of telecoms, looking at operator strategy and financial performance, as well as regulatory developments, spectrum allocation and the like. She holds a Bachelor's degree in modern languages and an MA in Italian language and literature.

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