Virgin Media O2’s Q1 financials show a promising outlook for the company’s network rollout in the UK, including plans for fiber-to-the-premises (FTTP) and 5G. The cable and mobile provider emphasized its commitment to reaching 80% of the UK with full fiber in the coming years and shared that it expects to cover 50% of the country with 5G by the end of this year. This is somewhat behind its competitors but is good news for O2 customers nonetheless.
The company reported 16.3 million homes serviceable by the end of March, a significant increase from the previous year. The ‘homes serviceable’ metric replaces the former ‘homes passed’ statistic and includes homes capable of accessing Gigabit service from either Virgin Media O2 or a partner network. The breakdown of homes with full fiber access versus those still on HFC remains unclear.
Virgin Media O2 attributes the growth of its serviceable homes primarily to nexfibre, the fiber joint venture established by its parent companies Telefonica and Liberty Global, as well as InfraVia Capital Partners in 2021. Virgin Media O2 is a key wholesale tenant on this network, and its Q1 report states that the serviceable FTTH footprint will reach up to 23 million homes by 2028.
Other companies in the UK are also pushing for more comprehensive fiber implementation. According to analyst firm Point Topic, over 15 million UK premises had FTTP coverage at the end of Q1, a significant increase from 13 million at the end of last year.
In its Q1 2022 results, Virgin Media O2 reported having 5.8 million fixed customer relationships, an increase of almost 250,000 from the previous year. However, the Q1 revenue for this segment declined by 4.8% year-on-year to £958.3 million. On the other hand, mobile revenues grew by 3.4% to £1.4 billion, pushing up the company’s total earnings by 2%.
Virgin Media O2 has made substantial progress in its 5G network rollout, boasting 50% outdoor population coverage in 2,100 towns and cities by the end of March. The company also unveiled its first 5G services on the London Underground during Q1, with plans to extend 5G coverage across the entire Tube network by the end of 2024.
To maintain customer satisfaction and secure their loyalty, Virgin Media O2 must continue focusing on its broader network development, including expanding access to full fiber and 5G services.