Virgin Media O2 (VMO2) reaffirmed its full-year 2026 guidance after delivering a second quarter focused on fiber expansion, wholesale growth and enterprise connectivity despite continued pressure in the UK’s broadband market.
The operator expanded its full-fiber footprint to 9 million premises through its partnership with nexfibre, while extending its homes serviceable footprint to 18.81 million from 18.54 million a year earlier. All 18.8 million serviceable homes can now access gigabit broadband, reinforcing Virgin Media O2’s long-term strategy to monetize next-generation fixed and mobile infrastructure.
Virgin Media O2 reported Q2 revenue of £2.399 billion, down 7.9 percent on an adjusted basis following the Daisy transaction. Total service revenue declined 3.9 percent to £2.043 billion, while first-half revenue fell 7.2 percent and service revenue decreased 3.5 percent.
Virgin Media O2’s consumer revenue dipped 5 percent, with consumer mobile service revenue declining 1.9 percent and fixed service revenue falling 6.2 percent amid broadband competition and customer retention initiatives.
Broadband remained the most competitive segment. Virgin Media O2 ended June 2026 with 5.70 million broadband customers, compared with 5.75 million a year earlier and 5.72 million at the end of the first quarter. Broadband losses improved to 18,600 from 21,100 in the previous quarter, indicating gradual stabilization despite continued pricing pressure across the UK market.
Average revenue per user (ARPU) also reflected the competitive environment. Consumer fixed ARPU declined to £46.43 from £47.22 a year earlier. Consumer mobile ARPU decreased to £16.44 from £16.76, while business mobile ARPU fell to £16.18 from £17.15, mainly due to promotional pricing, customer mix changes and lower out-of-bundle spending.
Virgin Media O2 maintained one of the UK’s largest mobile customer bases with 45.7 million mobile connections. Internet of Things (IoT) connectivity continued to expand, with IoT connections increasing to 16.4 million from 15.4 million a year earlier, highlighting rising enterprise demand for connected devices across industries.
Wholesale operations delivered one of the strongest performances during the quarter. While total wholesale revenue declined 0.5 percent, wholesale service revenue increased 5.4 percent year over year, supported by MVNO growth and approximately £14.7 million in fixed pre-enablement and installation income. The company signed a new Mobile Virtual Network Operator (MVNO) agreement with Monzo.
Capital investment remained focused on network expansion. Capex totaled £429.6 million during the first half of 2026, compared with £546.2 million in the corresponding period of 2025. The lower spending reflected the timing of infrastructure projects and reduced network construction activity as Virgin Media O2 transitions from large-scale deployment toward monetizing its upgraded gigabit network.
The operator also continued integrating O2 Business following the Daisy transaction, expanding capabilities in managed communications, cloud connectivity, cybersecurity and enterprise digital services.
Virgin Media O2 reaffirmed its full-year 2026 outlook, expecting Adjusted EBITDA growth of around 1 percent to 2 percent, Capex of £1.8 billion to £2.0 billion, expansion of the 9 million-premise full-fiber footprint through nexfibre, and disciplined capital allocation.
FASNA SHABEER
