VMO2 loses fixed and mobile customers in Q2

The company’s fixed-line customer base fell by 13,600 customers in Q2, down to 5.8 million, which it describes as ‘moderate losses on existing footprint’.

However it claims its network expansion accelerated, with fibre built to 295,300 additional premises in Q2 – which is apparently an increase in build pace vs Q2 2023 and Q1 2024. This was predominantly on behalf of the Nexfibre joint venture, of which VMO2 is the build supplier and wholesale tenant. Overall its full fibre footprint reached 5 million premises at the end of the quarter.

VMO2’s mobile contract base came in at 15.9 million with a reduction of 118,400 connections in Q2 ‘due to lower activity at the premium end of the market.’

Q2 total revenue decreased 1.4% YoY, and revenue ‘excluding the impact of Nexfibre construction’ decreased 4.1%. Total mobile revenue decreased 6.4%, which it blames on low margin handset revenue, which decreased 19.5%. Meanwhile adjusted EBITDA came in at £998 million, down 1.6% YoY.

In terms of 2024 guidance, it expects to deliver ‘a low to mid-single digit decline’ in revenue excluding Nexfibre construction, pointing to low margin hardware revenue as a ‘continued headwind’. It expects combined consumer fixed revenue and mobile revenue excluding handsets to remain stable, and a low to mid-single-digit decline in Adjusted EBITDA excluding the impact of Nexfibre construction.

“Despite a tough trading environment, we remained focused on delivering more for our customers, continuing to invest significantly in our networks and services, to the level of more than £1 billion so far this year, and successfully executing price changes,” said Lutz Schüler, CEO of Virgin Media O2. “We have maintained consumer fixed and mobile revenue excluding handset, with overall revenue impacted predominantly by mobile hardware headwinds, and profitability is on track and in line with our full year guidance.

 “Looking ahead, our new network sharing agreement with Vodafone UK builds on the success of our existing relationship and also keeps Virgin Media O2 in a strong position should the Vodafone-Three merger be approved – an outcome we support and believe would be a positive step for investment in the UK’s digital infrastructure. Looking to the second half of the year, our strategy to invest in key drivers of future growth is the right one, and we’re focused on delivering while transforming and simplifying our business for long-term success.”

Meanwhile, the telco hasn’t done too well in Ofcom’s latest telecoms and pay-TV complaints rankings. Virgin Media, alongside NOW Broadband and EE, were the most complained-about landline providers. Virgin Media was also the most complained-about pay-TV provider, the second most complained about broadband provider, and O2 remains the most complained-about mobile operator, with complaints again mostly driven by how customers’ grumbles were being handled.

Commenting on the complaints rankings, Rocio Concha, Which? Director of Policy and Advocacy stuck the boot in, saying: “Recent Which? research named Virgin Media the worst broadband firm for customer service. Half (50%) of Virgin Media customers experienced at least one customer service issue when getting in touch with their provider in the year to May 2024.

"It is never OK for firms to provide sub-standard customer service, but in an essential sector providing vital services millions rely on every day, it is completely unacceptable. Virgin Media and any other firms falling short must improve their customer service and give consumers the support they deserve."