Virgin Media O2 reported mixed financial and operational performance for Q4 and full year 2025, with revenue pressure offset by EBITDA margin expansion, cost efficiencies, fibre expansion and continued investment in mobile and broadband infrastructure. The company’s strategy remains centered on fixed-mobile convergence (FMC), gigabit connectivity, IoT growth and disciplined Capex as it prepares for a softer 2026 outlook.
Revenue and Profitability: Margin Gains Despite Top-Line Pressure
Virgin Media O2 delivered 2025 revenue of £10,113.1 million, down 5.3 percent. Q4 revenue declined 5.9 percent to £2,556.9 million.
When excluding handset and nexfibre construction impacts, guided revenue increased 0.2 percent to £7,706.5 million, indicating underlying resilience in core telecom services.
Guided Adjusted EBITDA: £3,894.1 million, up 0.9 percent
Total Adjusted EBITDA: £3,879.5 million, down 0.4 percent
EBITDA margin improved to 38.4 percent, up from 36.5 percent
The margin expansion reflects structural cost efficiencies and Opex reductions, helping offset revenue declines.
Subscriber Trends: Broadband Losses Offset by IoT and Wholesale Growth
Fixed-Line and Broadband
Total fixed customer relationships: 5.79 million
Net reduction in 2025: 145,100 customers
Broadband connections: 5.69 million
Annual broadband net loss: 138,400
Q4 broadband net loss narrowed to 16,700, showing improving momentum
The broadband base contraction reflects competitive pressure and market saturation, though quarterly trends suggest stabilization.
Mobile and IoT Growth
Retail mobile connections: 22.43 million
Contract mobile net loss: 397,500
Total retail net additions: +496,800, driven by:
IoT growth of 1.4 million connections
Wholesale Expansion
Wholesale connections: 10.4 million
Annual growth: +382,400
IoT and wholesale growth are becoming key drivers of connection expansion, offsetting consumer contract softness.
ARPU Performance: Mobile Growth, Fixed Slightly Down
Consumer mobile contract ARPU increased, supported by the company’s dual-brand strategy.
Fixed-line ARPU
Q4 monthly ARPU per customer: £47.36
Q4 2024 comparison: £47.74
The slight decline reflects competitive pricing and retention activity, typical of mature broadband markets.
Capex, Free Cash Flow and Cost Efficiency
Virgin Media O2 maintained heavy infrastructure investment while improving cash flow.
Capex (Property & Equipment additions)
FY2025 investment: £2,089.2 million
Adjusted Free Cash Flow
Full year FCF: £393.1 million
Q4 FCF inflow: £750.4 million
Profitability improvements were supported by:
Structural Opex cost reductions
Continued efficiency initiatives across operations
Network Expansion and Technology Strategy
The company continued expanding fibre and 5G infrastructure to support long-term growth.
Network footprint milestones
Full fibre footprint: 8.3 million premises
Gigabit footprint: 18.8 million premises
5G outdoor population coverage: 87 percent
Strategic priorities include:
Fixed-Mobile Convergence (FMC) leadership
Expansion of gigabit broadband
Growth in IoT connectivity
Launch of O2 Daisy for business customers
Continued operating model simplification
2026 Outlook: Conservative Guidance and Continued Investment
Virgin Media O2 expects a challenging but investment-driven 2026.
Guidance
Total service revenue: Decline of 3 percent to 5 percent
Adjusted EBITDA: Decline of 3 percent to 5 percent
Capex (P&E additions): £2.0 billion to £2.2 billion
The outlook signals a transition year focused on network expansion, cost discipline and FMC growth, positioning the company for longer-term revenue recovery.
Strategic Takeaway
Virgin Media O2’s 2025 results highlight a telecom operator in transformation:
Revenue pressure from market competition
Strong EBITDA margin expansion from cost control
Broadband losses balanced by IoT and wholesale growth
Continued heavy investment in fibre and 5G
FMC strategy and enterprise services driving future growth
The company is entering 2026 with disciplined Capex, expanding gigabit infrastructure and a sharpened operating model, aimed at restoring growth in the medium term.
BABURAJAN KIZHAKEDATH
