Virgin Media O2 Optimistic About 5G And Fiber Rollout

Buoyed by pretty solid first quarter financials, Virgin Media O2 is talking a good game for UK network deployment in both fiber-to-the-home and 5G.
The U.K. cable and mobile player used its first-quarter numbers to reaffirm its goal of covering 80 percent of the country with full fiber over the next few years, and let us know that it's on track to meet that goal. It also noted that it expects to cover half the country with 5G by the end of this year, which is still behind some of its competitors, but that's good news for O2 customers.
But while VMO2 is happy to share its network evolution goals, it remains frustratingly reluctant to reveal them in terms of actual metrics, especially in the fiber space.
As of the end of March, the telco claimed 16.3 million households available, an increase of 107,800 in three months and more than half a million more than the same period last year. "Serviceable households" replaces VMO2's previous household pass-through metric and includes households that can receive gigabit service from VMO2 or partner networks. We don't know how many of these homes can use full fiber and how many are still HFC.
VMO2 said the new serviceable homes added in the first quarter came primarily from nexfibre, a fiber joint venture created last year by its parent company Telefonica and Liberty Global, along with investor InfraVia Capital Partners. VMO2 is the primary wholesale tenant on the network.
"The upgrade of our existing network to full fiber is still ongoing, and our available FTTH footprint will reach 23 million homes by 2028," VMO2 said in its first quarter report.
Of course, Virgin Media O2 isn't the only company pushing full fiber in the UK. Judging by the latest figures shared by Point Topic this week, it's far from it.
The analyst firm noted that at the end of the first quarter, more than 15 million U.K. premises had FTTP coverage, up from 13 million at the end of last year. That's a pretty good effort by the country's fiber manufacturers.
More than 1.6 million of these premises can choose between three separate fiber ISPs, compared with 1 million by the end of 2022, while 2.5 million can access two or more, up from 2.1 million. That's obviously good news from a competitive standpoint, but it's little consolation for people living in rural and remote areas that still lack fiber coverage. But all in all, good progress is being made here.
Returning to VMO2, the operator ended the first quarter with 5.8 million fixed customer relationships (fiber and other), nearly 250,000 more than it claimed in the same period last year. However, the division's revenues fell 4.8% year-on-year to £958.3 million.
However, this decline was offset by mobile growth. Mobile revenue grew 3.4 percent to $1.4 billion, helping to push up the carrier's total revenue and drive revenue growth by 2 percent.
That said, VMO2 reported a net loss of 175,000 retail mobile customers in the quarter, but its base increased by nearly 1.5 million year-on-year to 34.1 million.
By the end of March, it had achieved 50% 5G outdoor population coverage in 2,100 towns and cities and said it was on track to cover 50% of the country's population by the end of the year. It also highlighted the first 5G services launched on the London Underground this quarter, and said it will continue to roll out 5G on the Tube this year and next, with the goal of achieving full coverage by the end of 2024.
This will help VMO2 keep London customers happy, but telcos will need to keep a close eye on wider network developments if they want to attract and retain mobile customers.