Virgin Media O2 reported a 5.7 percent decline in third-quarter 2026 revenue to £2.43 billion as broadband subscriber losses, falling fixed-line ARPU and intense competition affected its financial performance. The UK telecom operator invested £574.7 million in capital expenditure (capex), expanded 5G+ population coverage to 86 percent and increased its full-fibre footprint to 9.4 million premises.
The company, jointly owned by Liberty Global and Telefonica, also announced a transformation programme targeting £800 million in annualised cost savings by 2029, supported by organisational restructuring, artificial intelligence, digital services and reduced fibre investments.
Virgin Media O2 Q3 2026 Revenue and Profit
Virgin Media O2 generated total revenue of £2,426.7 million in Q3 2026, down 5.7 percent year over year on an adjusted basis.
Total service revenue decreased 3.5 percent to £2,036.7 million, reflecting weaker consumer fixed-line revenue and changes in the business services portfolio.
Consumer revenue declined 5.2 percent to £1,845.1 million.
Consumer mobile service revenue decreased 1.7 percent to £808.6 million, while consumer fixed service revenue fell 6.4 percent to £754.6 million.
Business revenue reached £298.9 million, representing an adjusted decline of 3.7 percent.
Business service revenue declined 5.3 percent to £231.7 million as the operator continued streamlining its B2B product portfolio.
Wholesale revenue remained stable at £273.5 million, while wholesale service revenue increased 1.8 percent to £241.8 million.
Adjusted EBITDA declined 2.6 percent to £995.2 million, although the adjusted EBITDA margin improved to 41 percent from 39.8 percent.
Operating expenses decreased 5.4 percent on an adjusted basis, helping offset weaker service revenue.
Virgin Media O2 reported a net profit of £1.5 million compared with a net loss of £12.7 million a year earlier.
Virgin Media O2 Capex Reaches £574.7 Million
Virgin Media O2 reported Q3 2026 capex of £574.7 million, representing an adjusted increase of 2.4 percent year over year.
Property and equipment (P&E) additions reached £530.9 million, up 0.5 percent on an adjusted basis.
During the first nine months of 2026, total capex declined 4.6 percent to £1,589.8 million.
P&E additions during the nine-month period decreased 5.3 percent to £1,481.6 million.
The operator maintained its full-year 2026 guidance for P&E additions of £2.0 billion to £2.2 billion.
Virgin Media O2 is reviewing its fibre investment strategy to improve capital efficiency.
The company will halt its fibre upgrade programme beyond existing commitments and prioritise lower-cost upgrades to its hybrid fibre-coaxial (HFC) network.
It plans to introduce broadband speeds of up to 2Gbps across the majority of its HFC network in 2027.
The company will consider future fibre investments in areas without competing alternative fibre networks, supported by off-balance-sheet financing where appropriate.
Virgin Media O2 5G+ Coverage Reaches 86 Percent
Virgin Media O2 expanded its 5G+ outdoor population coverage to 86 percent by the end of September 2026.
The 5G+ network uses standalone 5G technology, which can support improved network performance and advanced connectivity services.
The operator’s full-fibre footprint reached 9.4 million premises, including coverage through the nexfibre network.
Virgin Media O2 reported 18.81 million serviceable homes, compared with 18.68 million a year earlier.
Its network passed approximately 16.23 million homes.
The company is prioritising improvements to existing broadband infrastructure while exploring wholesale partnerships to extend services beyond its current network footprint.
Virgin Media O2 Mobile Subscribers Decline to 46.35 Million
Virgin Media O2 reported 46.35 million mobile connections at the end of Q3 2026, compared with 46.58 million a year earlier.
The operator recorded a net reduction of 49,800 mobile connections during the quarter.
Contract mobile connections reached 24.44 million, comprising 12.43 million consumer connections, 2.92 million business connections and 9.09 million wholesale connections.
The operator added 31,700 contract connections during Q3 2026, supported by 59,000 wholesale net additions.
However, consumer contract connections declined by 7,800, while business contract connections fell by 19,500.
Prepaid connections reached 7.91 million, with 27,900 net additions during the quarter.
Internet of Things (IoT) connections totalled 13.99 million, compared with 13.56 million a year earlier.
The IoT segment recorded quarterly net losses of 109,400 connections.
Virgin Media O2 Broadband Subscribers and ARPU
Virgin Media O2 reported 5.48 million consumer fixed-line customer relationships at the end of September 2026, down from 5.56 million a year earlier.
Consumer broadband connections declined to 5.40 million from 5.47 million.
The company lost 23,300 fixed-line customer relationships during Q3 2026, compared with losses of 32,700 in Q3 2025.
Broadband net losses improved to 22,100 from 30,200 a year earlier.
Consumer fixed-line ARPU declined 5 percent to £45.83, compared with £48.24 in Q3 2025.
The decline reflects competitive pricing pressures and the timing of annual price increases.
In contrast, consumer mobile contract ARPU increased 2 percent to £18.12, compared with £17.76 a year earlier.
The improvement in mobile ARPU reflects the company’s focus on customer value management despite pressure on subscriber numbers.
The earnings release does not disclose a separate customer churn rate. However, the reported net additions and losses indicate continued pressure on broadband customer retention and consumer mobile subscriptions.
Virgin Media O2 Expands AI and Digital Transformation
Virgin Media O2 is increasing investment in artificial intelligence, automation and digital customer service to improve operational efficiency.
The company launched a voice AI agent to handle broadband fault calls, supporting its customer service transformation programme.
Virgin Media O2 expects greater adoption of AI tools and digital channels to improve employee productivity, simplify operations and reduce customer service costs.
The operator also reported improvements in customer experience, with Virgin Media recording the lowest broadband complaint levels among major providers in Ofcom’s latest published data.
Its transformation programme targets approximately £800 million in annualised cost savings by 2029, including £400 million in 2027 and £600 million in 2028.
Organisational restructuring is expected to contribute approximately £300 million to the overall savings target.
The programme will involve approximately £250 million in restructuring costs, with an expected payback period of less than one year.
Virgin Media O2 2026 Financial Outlook
Virgin Media O2 reaffirmed its full-year 2026 financial guidance despite challenging market conditions.
The company expects total service revenue to decline between 3 percent and 5 percent, with adjusted EBITDA also projected to decrease between 3 percent and 5 percent.
Full-year P&E additions are expected to reach £2.0 billion to £2.2 billion, while adjusted free cash flow is forecast at approximately £200 million.
Virgin Media O2 reported an adjusted free cash flow outflow of £197.3 million during Q3 2026.
The operator’s strategy now focuses on improving profitability, strengthening customer retention, expanding 5G+ services and reducing capital-intensive fibre investments.
Virgin Media O2’s ability to stabilise broadband subscribers, sustain mobile ARPU growth and achieve its £800 million savings target will be critical to its financial recovery in 2027–2029.
BABURAJAN KIZHAKEDATH
