Virgin Media O2: Tough first quarter as customers head for competitors
Virgin Media O2 (VMO2) has said it experienced lower customer activity and a decline in handset revenue in the first quarter of 2024.
The British telecoms company reported that its total fixed customer base fell by 2,000 customers to 5.8m in the first three months of the year due to a slowdown in customer activity in the fixed market.
VMO2 said it also lost a small number of its total mobile customers, both contract and prepaid, which dropped to 23.5m from 23.9m in the first quarter of 2023. The telco added 5,300 broadband connections though.
Total revenue decreased marginally by 0.5 per cent year on year to £2.58bn, which VMO2 said was mainly driven by handset revenue decline that offset growth in mobile and fixed line service revenue.
Adjusted EBITDA dropped 1.4 per cent year on year to £935m in the first quarter.
Lutz Schüler, chief executive of Virgin Media O2, said: “While there is much to do in the remainder of the year, we are gathering momentum in accelerating fibre build and marketing the nexfibre footprint, launching new services to enhance and improve customer experience, and progressing wider IT efficiency programmes as we continue our digital transformation.”
In September last year, VMO2 bought British broadband provider Upp and plans to “carry out integration work”, with the goal of selling it on to UK fibre builder, Nexfibre.
Nexfibre, a joint venture by Liberty Global, Telefonica and infrastructure investment firm Infravia, hopes to expand its reach to 175,000 sites in the East of England through the transaction.
Schüler continued: “Ahead of price rise implementation, we delivered improved service revenue growth across both mobile and consumer fixed. Our teams also continue to innovate as shown by the targeted launch of 5G Standalone and a new 2Gbps broadband service on the nexfibre network in Q1, highlighting the future evolution of our networks as demand rises and new technologies emerge.
“Our performance in Q1 sets the foundations for our full year guidance as we make key investments to support future growth,” he added.
VMO2 reiterated full year guidance of “stable to declining revenue” and a low to mid-single-digit decline in adjusted EBITDA, but this excludes the impact of VMO2’s ongoing nexfibre construction.