Broadband News

Virgin Media adds 35,000 new broadband customers but revenue flat

The latest results for Virgin Media show how important the Project Lightning expansion is, they may have built out new network to some 102,000 premises in the last quarter and similar figures in the previous quarter but in the face of an ARPU that dropped from £51.58 to £51.36 it is clearly a tough battle.

The flat revenue (0.1% drop once figures were rebased in Q1) was apparently driven by the drop in mobile handset sales, which is something others are reporting and the impact of this would be worse if it was not for the increased revenue from the residential cable customer growth (35,000 net additions in Q1 to give a total of 5,259,600 broadband customers in the UK). Of course as broadband customers will testify the prices are continuing their creep up, both broadband packages and TV bundles, given the shift for the VDSL2 market Virgin Media is competiting with and the emergence of new competing FTTP operators things are only going to get tougher.

The launch of the 500 Mbps is a high point and while this could be seen as innovation it is in our view a logical response to the growing footprint for 330 Mbps headline speed services that BT Consumer can market due to the Openreach roll-outs and if Sky as expected gets on board with selling ultrafast Openreach services the fight for the title of 'fastest widely available broadband in the UK' is a battle they do not want to lose.

One thing we spotted that we did not know is that the new Intelligent Wi-Fi that features in so many Virgin Media adverts these days is cloud based, why cloud based we don't know since many other devices can do beam forming and other optimisations without sharing data to an online cloud, it might be that data from other nearby Virgin Media routers is compared to optimise things e.g. reporting what other networks are visible and which bands they are in may help in optimisation decisions so long as this is only used for Wi-Fi optimisation.

The next step that Virgin Media could take to is to retire all its sub 100 Mbps products to only sell the VIVID 100 and faster tiers, this when combined with the size of the footprint and that PR around the two Gigabit cities when they appear means they could survive roll-outs of full fibre. Though the trump card remains the bundled nature and the difficulty others will have in reproducing the TV package bundles - though for a younger generation that is used to mix and match subscriptions that it can turn off/on as they manage their monthly budgets the long term tie in that bundling achieves will be less popular.

The UK broadband market is going to get crowed in the cities in the next decade for sure and not just at the wholesale level, we are going to have some cities with widespread infrastructure competition.

Comments

Currently paying £47 a month for 200mbit, its gone up £10 since I signed up 3 years ago :(

  • doowles
  • 2 months ago

ive got 350 with phoen for 32 a month - only renewed a week or two ago

  • BuckleZ
  • 2 months ago

IMHO it does not matter how fast VM broadband is, or becomes, if the service becomes unreliable once an area becomes saturated with competing customers, because there is insufficient investment in further equipment to cope with peak loads. That is certainly why I left them. Moreover it is backed up by appallingly bad customer service in my experience.

  • Mikejc
  • 2 months ago

Post a comment

Login Register