VMO2 FY21 sales fall 1.2%; owners Liberty/Telefonica seek fibre joint venture partners

18 Feb 2022

Virgin Media O2 (VMO2), the enlarged entity created by the merger of Virgin Media and O2 UK, has published its financial results for the twelve months ended 31 December 2021, in a year which it said saw it ‘cement [its] challenger position with leading gigabit rollout and delivery of strong operating momentum since formation’.

VMO2 reported total transaction adjusted revenue of GBP10.38 billion (USD14.1 billion) for FY 2021, representing a 1.2% year-on-year fall, attributed to increases in consumer fixed and other revenue being more than offset by declines in mobile revenue and B2B fixed revenue. Meanwhile, FY21 transaction adjusted EBITDA increased by 1.9% on an annualised basis to reach GBP3.67 billion, driven by ‘the suppression of certain costs during the COVID lockdown in the first half the year’.

With regards to operational indicators, in the fixed sector VMO2 reported a total of 5.678 million ‘fixed line customer relationships’ as of 31 December 2021, up from 5.627 million a year earlier; of the most recent figure, 5.597 million were fixed broadband subscriptions, up from 5.420 million at end-2020. In the mobile sector, meanwhile, VMO2 reported a total of 42.243 million mobile connections, up from 39.547 million, of which 32.277 million were retail (Dec-20: 30.337 million), and 9.967 million were wholesale (Dec-20: 9.211 million).

One notable announcement made within the release of its financial performance was confirmation that VMO2 parent companies Liberty Global and Telefonica have initiated discussions with a number of potential financial partners regarding an opportunity to participate in a network build joint venture. According to VMO2, the focus of this entity will be on constructing a full fibre network covering up to seven million premises in new greenfield areas by end-2027. VMO2 will reportedly commit to being an anchor tenant of the network, though it is understood the infrastructure will also be made available to other ISPs on a wholesale basis.

In the meantime, VMO2 also offered an update on its existing infrastructure deployments, noting that its ‘Project Lightning’ network expansion programme reached 93,000 new premises in Q4 2021, bringing the total number of premises passed that year to 328,000 and increasing the cumulative Project Lightning build to 2.7 million premises. In addition, VMO2 said that FTTP upgrade pilots were ‘progressing well’, ahead of the planned deployment of full fibre across its entire fixed network commencing later this year, with completion of this work expected in 2028.

United Kingdom, Liberty Global, O2 UK, Telefonica, Virgin Media, Virgin Media O2 (VMO2)