Virgin Media O2’s total revenue declined by 4.1 per cent in Q2, excluding nexfibre construction.
The company said that its combined consumer fixed and mobile revenue, excluding handset, was stable, while low margin mobile handset and B2B fixed revenue headwinds remained.
Its adjusted EBITDA also decreased 1.5 per cent, excluding nexfibre construction.
The company’s contractual fixed price rise introduction improved average revenue per user, per fixed line customer was 3.1 per cent year-over-year, with a modest 13,600 reduction in fixed-line customer relationships. Its mobile contract base was also reduced by 118,400, with less activity at the premium end of the market.
However, Virgin Media O2’s combined full fibre footprint reached the milestone of 5 million premises, with build accelerating. The company also reported that the first stage of the mobile Shared Rural Network was now complete and this month it announced a new long-term mobile network agreement with Vodafone UK.
It added that it expects to deliver a low to mid-single-digit decline in revenue, excluding nexfibre construction, with low margin hardware revenue a continued headwind. However combined consumer fixed revenue and mobile revenue, excluding handset, are expected to remain stable. Adjusted EBITDA, adjusted free cash flow, cash distributions to shareholders and all other 2024 guidance was also reiterated as investment in growth drivers continues, with nexfibre marketing and sales activity expected to ramp in the second half of 2024.
Lutz Schüler, CEO of Virgin Media O2, said, “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. 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.
“Our fibre deployment has gathered significant pace, with the Virgin Media O2 fibre footprint now hitting 5 million premises as we push forward towards creating the UK’s largest national fibre challenger. Our 5G mobile connectivity now covers almost two-thirds of the UK population and the team pulled out all the stops to hit our Shared Rural Network target, improving mobile coverage in rural areas of the country. 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.”