Virgin Media O2: Aiming for growth
VMO2 had another mixed quarter to end a difficult 2024, with revenue growth improving but EBITDA growth falling, and other metrics mixed at best.
The company hopes to put this behind it with guidance for both revenue and EBITDA growth in 2025, a tough ask given current momentum.
Ultimately achieving or exceeding this may depend on altnet pressure receding, which we expect it to do, but perhaps more towards the end of the year than the beginning.
Related reports
Market revenue dipped into marginal decline in Q3, as both ARPU and sub growth weakened, both partly driven by the continued altnet onslaught
Backbook pricing effects will be of marginal help in the short term, but new customer pricing competition is still fierce, and households are still cash-strapped
In the longer term, pressure from the altnets should wane substantially as their roll-outs slow and they consolidate towards a wholesale model (or fail)
Virgin Media O2: Mixed results but outlook improving
5 November 2024VMO2’s Q3 results were mixed, with underlying revenue and EBITDA slightly improving (but still negative), subscriber momentum slightly improved, but customer service issues still apparent.
The company’s broadband momentum is clearly being significantly curtailed by altnet gains (and Openreach overbuild), with substantial network expansion resulting in anaemic subscriber growth.
A return to growth in 2025 certainly looks possible, but it will depend on customer service issues being resolved, and industry consolidation going VMO2’s way.
VMO2/TTG merger talks (again) : Still tricky
12 February 2024According to press reports, VMO2 is in early stage discussions over buying TalkTalk’s consumer retail broadband business, but not its wholesale business, which may leave the latter in limbo.
There is strong industrial logic to the deal, with a sub-brand useful, and significant synergies from moving the TalkTalk base to VMO2’s network, with the latter gain at Openreach’s expense.
There would be major regulatory hurdles for the deal, with concerns on both a retail and wholesale level, and particularly the future of the altnets, with any deal likely having to protect this.
VMO2 and CityFibre merger talks: A tough sell
20 March 2023VMO2 and CityFibre are reportedly holding merger talks, which would bring together by far the two largest fibre builders competing with Openreach.
On a conventional altnet acquisition assessment, CityFibre is an attractive target given its scale, but a very expensive one at a full price given the degree of overlap.
The acquisition might still be attractive given the opportunity to take out a wholesale competitor but, for this same reason, regulatory clearance would be very tough.
Market revenue dipped into marginal decline in Q3, as both ARPU and sub growth weakened, both partly driven by the continued altnet onslaught
Backbook pricing effects will be of marginal help in the short term, but new customer pricing competition is still fierce, and households are still cash-strapped
In the longer term, pressure from the altnets should wane substantially as their roll-outs slow and they consolidate towards a wholesale model (or fail)
Virgin Media O2: Mixed results but outlook improving
5 November 2024VMO2’s Q3 results were mixed, with underlying revenue and EBITDA slightly improving (but still negative), subscriber momentum slightly improved, but customer service issues still apparent.
The company’s broadband momentum is clearly being significantly curtailed by altnet gains (and Openreach overbuild), with substantial network expansion resulting in anaemic subscriber growth.
A return to growth in 2025 certainly looks possible, but it will depend on customer service issues being resolved, and industry consolidation going VMO2’s way.
VMO2/TTG merger talks (again) : Still tricky
12 February 2024According to press reports, VMO2 is in early stage discussions over buying TalkTalk’s consumer retail broadband business, but not its wholesale business, which may leave the latter in limbo.
There is strong industrial logic to the deal, with a sub-brand useful, and significant synergies from moving the TalkTalk base to VMO2’s network, with the latter gain at Openreach’s expense.
There would be major regulatory hurdles for the deal, with concerns on both a retail and wholesale level, and particularly the future of the altnets, with any deal likely having to protect this.
VMO2 and CityFibre merger talks: A tough sell
20 March 2023VMO2 and CityFibre are reportedly holding merger talks, which would bring together by far the two largest fibre builders competing with Openreach.
On a conventional altnet acquisition assessment, CityFibre is an attractive target given its scale, but a very expensive one at a full price given the degree of overlap.
The acquisition might still be attractive given the opportunity to take out a wholesale competitor but, for this same reason, regulatory clearance would be very tough.