Virgin Media sheds 24,600 video subscribers but gains 7,100 broadband customers
The Virgin Media financial results for the period to the end of June 2019 have been released and while lots of the figures are mixed in with the Ireland or other parts of the Liberty Global operation there is enough detail on the UK to see what may be exciting and worrying the operator who has the largest ultrafast broadband footprint in the UK.
The good news is that there are now 5,266,700 broadband subcribers a rise of 7,100 in the last quarter, the bad news is that they managed to lose 24,600 video subscribers. Interestingly at a time when lots of people are saying phone lines are dead and why do we have to bother paying line rental the number of telephone subscribers rose by 23,700.
The rise in broadband numbers is good, but this off the back of an increase in network footprint of 126,000 premises and while take-up will rise over time in those newly passed areas, this does suggest that either the majority of the public are not chasing much higher speeds at this time or they are waiting for someone other than Virgin Media to arrive. Of course the speed the majority of people are happy with will change over time, but experience suggests many people are not willing to pay much more (if any more) for the higher speeds.
The expansion of the DOCSIS 3.1 footprint which is set to start in Southampton and quickly cover the rest of the UK is likely to be less of a response to what BT Group are doing but the growing number of competitors whose Gigabit full fibre service offering will usually undercut the price of both BT and Virgin Media products. The Ofcom research showing that younger people are much more likely to use OTT TV services than traditional linear satellite, digital, cable TV channels means that the unique nature of the bundles Virgin Media previously offered are not the lure they used to be.
Virgin Media via its Project Lightning roll-out is probably the third largest full fibre provider behind Openreach and Hyperoptic. Of course their network footprint at around the 15 million premises mark is massively larger once you add the FTTN footprint with coax into the home.
With the race to 100% full fibre coverage underway in theory, it will be interesting to see what the Governments response will be in coax cable areas if all the operators say that it is not commercial viable to deliver their own full fibre services. We fully expect that the existing cable areas will see commercial roll-out from one or more full operator but there will be enclaves that get missed out. It will all boil down to what is the difference between Gigabit download on DOCSIS 3.1 and Gigabit download on full fibre.