Virgin Media to Bring Full-Fibre Broadband to 23m Premises

As long-teased, Virgin Media O2 (VMO2) has increased the target for its full-fibre rollout and now aims to reach 23 million premises by the end of 2027, in a bid to take on BT.

The newly-merged VMO2 announced last summer that it will run full-fibre lines to all 14.3 million addresses reached by its existing cable broadband network. That’s in addition to the 1.2 million premises it’s already connected to fibre.

But VMO2 has also teased a future ambition of expanding its footprint by seven million premises. That would position Virgin Media to vie with BT’s Openreach as provider of the country’s next-generation internet infrastructure. Openreach is aiming to bring full fibre to 25 million premises by the end of 2026.

VMO2 has suggested it will seek third-party financing or open its network to wholesale partners in order to fund this expansion. In early February, VMO2 was actively seeking that investment, according to Sky News reports.

Now, VMO2’s results for the fourth quarter of 2021 confirm the expansion plans.

“We now plan to extend our footprint to ~23 million premises through a new fibre venture being set up by our shareholders,” chief executive Lutz Schüler said.

The expansion will be delivered through an unspecified joint venture. This may include wholesale deals with major ISPs such as Sky and TalkTalk, allowing them to resell services on VM’s network much as they already do on Openreach’s.

VMO2 said the expanded footprint and wholesale deals will give it access to a “wider pool of customers” and give it more opportunities to sell them other services such as O2’s mobile plans “due to the increased overlap of fixed and mobile services.” VMO2 is already a leader in triple- and quad-play bundles, with 45% of their broadband customers signing up for a mobile plan through Virgin Mobile or O2.

Meanwhile, VMO2’s results show growth in their broadband customer base: up by 60,000 customers to just shy of 5.6 million. O2’s mobile base, including customers of subsidiaries such as giffgaff and other MVNOs like Sky Mobile and Tesco Mobile that use their network, also grew, hitting 42.2 million.

VMO2 also celebrated the completion of the upgrade of its entire cable broadband network to deliver download speeds of 1.1Gbps. Take-up of those faster services is strong, pushing the average speed on the network to 214Mbps.

In 2021, “we saw sustained subscriber growth across fixed and mobile as the demand for fast, reliable connectivity remains, and delivered an increase in profitability while investing more than £2bn in our network, services and future growth drivers,” Schüler said.

He also noted that O2 is the only big four mobile network not to reintroduce EU roaming charges. “This challenger spirit runs deep across the organisation, and we have every intention of building on this energy and maintaining the momentum we’ve built up," he said.

Meanwhile, both O2 and Virgin Mobile will hand down tough inflation-linked 11.7% price increases to customers in April, hikes it's defended as necessary to continue investing in its services.