U.K. operator Virgin Media O2 raked in 42,300 broadband net additions in Q3, posting a strong performance in its first full quarter in operation.
Launched at the start of June in Q2 as a 50/50 joint venture between Liberty Global and Telefonica, the company previously provided only a partial earnings report covering its first 30 days.
Its Q3 broadband gains contributed to overall fixed customer net additions of 38,500 in the period, raising the operator’s fixed-line base to 5.7 million. Virgin Media O2 said in a press release it saw growth in both its existing footprint and areas covered by its Project Lightning fiber build. Fixed additions were up both sequentially from 22,200 and year on year on a pro forma basis from 37,600.
In a note to investors, James Ratzer of New Street Research noted “Virgin’s share of broadband net adds has been picking up in the past few quarters” compared to rival Openreach (a subsidiary of BT). A graphic accompanying the note showed Virgin’s share of U.K. broadband net additions reaching around 60% in Q3, compared to approximately 45% in Q3 2020.
“Not only is this being delivered on a sustainable basis, this is also being achieved at a time with ARPU trends are gradually improving as we lap the worst impact from the Best Tariff Notifications and the impact of price rises continues to be a positive support on results,” he wrote. “Fixed customer ARPU trends are still down -2.1% YoY in Q3, but an improvement from -3.4% YoY in Q2.”
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Project Lighting passed 67,000 new premises in Q3, boosting the total number of locations passed to 2.6 million. The operator is also getting started on a recently announced initiative to rebuild its entire network with fiber-to-the-premises by 2028, with upgrade pilots now underway.
Work to improve its existing hybrid-fiber coaxial network in the meantime continues, with 1.1 Gbps speeds now available to 12.8 million homes. The operator said it is on track to make those speeds available to its full footprint of 15.5 million homes by the end of 2021 and is trialing DOCSIS technology for a future upgrade which would deliver 2.2 Gbps.
The company posted revenue of £2.59 billion (approximately $3.5 billion) in Q3, roughly flat compared to pro forma revenue of nearly £2.58 billion in the year-ago quarter. Of this, £1.02 billion was from its fixed division, compared to £1.03 billion in Q3 2020. Fixed line ARPU fell slightly from £50.45 to £49.41.