Virgin Media O2 Faces Subscriber Losses Amid Price Increases

Virgin Media O2 has reported significant declines in its mobile and broadband subscriber base, attributing this loss primarily to recent price increases. In the past year, the company experienced a net loss of 397,500 mobile subscribers, with 164,800 leaving in the final quarter alone. This trend is largely linked to O2's decision to raise prices by £2.50 per month for its 15.6 million mobile customers, a move that will take effect in spring 2026. Additionally, the company lost 138,400 broadband customers in 2025, including 16,700 in the last quarter.

The Independent

The financial implications of these subscriber losses are concerning for Virgin Media O2. The company reported a 0.4 percent decline in underlying earnings for the year, totaling £3.9 billion, with a more pronounced 2.4 percent drop in the last quarter. Looking ahead, Virgin Media O2 anticipates further declines, projecting a drop in underlying earnings of 3 percent to 5 percent for the upcoming year, alongside a similar decrease in total service revenues. The company attributes these challenges to heightened promotional intensity and ongoing uncertainty in the consumer fixed market.

The Independent

In response to these challenges, Virgin Media O2 plans to implement cost-saving measures to mitigate the financial impact. Lutz Schuler, the chief executive, expressed confidence in the company's ability to navigate these difficulties, stating that they are well-positioned to capitalize on opportunities across their consumer, business-to-business, and wholesale sectors. Schuler emphasized that the foundations being established now are intended to build long-term customer trust and enhance future profitability.

The Independent

The backdrop of these subscriber losses includes significant industry developments. Virgin Media O2 was formed in 2021 following a £31 billion merger between Virgin Media and O2. Recently, the company, along with Liberty Global and Telefonica, has engaged in a joint venture to acquire the British alternative fibre firm Substantial Group for £2 billion. This acquisition aims to bolster their competitive stance against BT's Openreach, the largest fibre broadband provider in the UK.

The Independent

However, this move has raised concerns among competitors. Simon Holden, CEO of CityFibre, highlighted that the deal could significantly reduce competition, potentially forcing many Netomnia customers back to Virgin Media O2. He urged the Competition and Markets Authority (CMA) to thoroughly examine the implications of this merger, warning that it risks re-establishing a duopoly that could undermine the progress made in the UK telecommunications market.

The Independent

• “While we expect challenging market conditions to continue in 2026, we are well positioned to seize the right opportunities in each of our business areas – consumer, business-to-business and wholesale – and the foundations we’re putting in place today will help to build long-term customer trust and fuel future profitability and cash generation.” — Lutz Schuler, Chief Executive of Virgin Media O2

The Independent

As Virgin Media O2 navigates a challenging market landscape marked by subscriber losses and price increases, its strategic responses and industry developments will be critical in determining its future trajectory. The anticipated financial declines and competitive pressures underscore the complexities facing the telecommunications sector in the UK.

The Independent