Virgin Media O2 lost nearly 400,000 customers thanks to price hikes
Virgin Media O2 has issued a warning about expected declines in sales and earnings for 2026 following significant customer churn attributed to recent price rises.
The telecommunications giant reported a net loss of 397,500 mobile subscribers last year; a significant portion of which were the 164,800 subscribers who left in the last quarter, mainly due to O2’s price adjustments.
Last October, the company announced a further increase of £2.50 per month for its 15.6 million mobile customers, effective from spring 2026, revising a previously proposed increase of £1.80.
Simultaneously, Virgin Media O2 has seen 138,400 broadband customers leave in 2025, including 16,700 in the final three months of the year.
The company’s annual results showed a 0.4 per cent fall in underlying earnings for the year to £3.9bn, following a more pronounced 2.4 per cent fall in the last three months.
When adjusted to exclude its recent transactions with business-to-business provider Daisy, the group reported a 0.9 per cent rise in earnings for the full year, although it still saw a 1.3 per cent decline in the final quarter.
Going forward, Virgin Media O2 has issued a warning of steeper financial declines next year, predicting what it describes as “challenging market conditions” will continue.
This eliminates the Daisy acquisition, leading to a 3 percent to 5 percent decline in underlying earnings, while underlying total services revenues are also expected to decline by 3 percent to 5 percent.
Virgin Media O2 and Daisy Group last year combined their business communications and IT operations to form a telecoms company called O2 Daisy, which has annual sales of around £1.4bn.
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Virgin Media O2 said the lower sales outlook “reflects the planned modernization of its business-to-business product portfolio, as well as increased promotional intensity and ongoing uncertainty in the consumer fixed market.”
It will seek to achieve cost savings to offset the impact.
Virgin Media O2 CEO Lutz Schuler said: “While we expect challenging market conditions to continue into 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 are putting in place today will help build long-term customer confidence and increase future profitability and cash generation.”
Virgin Media O2 was formed in 2021 following the £31bn mega-merger between Virgin Media, owned by Liberty Global, and network O2, owned by Spanish rival Telefonica.
On Wednesday, Liberty Global, Telefonica and private equity firm InfraVia joined forces to buy British alternative fiber company Substantial Group for £2 billion.
The groups said the joint venture deal would strengthen BT’s competitive position against Openreach, the UK’s largest fiber broadband company and network operator.
Substantial, which operates the Netomnia fiber network, is expected to have more than 3.4 million fiber installations and more than 500,000 customers when the deal is completed, the companies said.
Nexfibre, a joint venture between Liberty Global, Telefonica and InfraVia, will acquire Substantial in a deal that is set to expand to eight million premises across the UK by the end of 2027.
However, rivals have already raised potential competitive concerns about the move.
CityFibre CEO Simon Holden said: “There is an 80 per cent overlap between these two players and if the deal goes ahead it will significantly reduce competition and choice available to consumers, as well as force hundreds of thousands of Netomnia customers back to Virgin Media O2.
“Given the extent of this overlap, the CMA needs to scrutinize the agreement thoroughly.
“Competition has led to lower prices, faster speeds and better services – and this deal risks re-establishing an ineffective duopoly between BT and VMO2 and undermining the significant progress the UK has made.”
