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Virgin Media O2 Warns of Declining Sales Amid Price Hikes
19 Feb
Summary
- Telecoms group lost 397,500 mobile customers in the past year.
- Annual earnings fell by 0.4% to £3.9 billion, with a further drop expected.
- A new merged entity, O2 Daisy, aims for cost savings in business operations.
Virgin Media O2 has issued a stark warning about declining sales and earnings projected for 2026. This outlook follows substantial customer losses, particularly in its mobile division, after implementing price hikes. The company reported shedding 397,500 mobile customers last year, with a significant portion of those losses occurring in the fourth quarter following O2's price adjustments.
Furthermore, the group experienced a decline in broadband customers, losing 138,400 users over the year. Annual results revealed that underlying earnings fell by 0.4% to £3.9 billion, with a notable 2.4% decrease in the final quarter. The company anticipates steeper declines in the coming year due to a challenging market environment.
In a strategic move to enhance efficiency, Virgin Media O2 and Daisy Group merged their business communications and IT operations to form O2 Daisy. This new entity is expected to achieve considerable cost savings. Meanwhile, a recent £2 billion acquisition of Substantial Group by Liberty Global, Telefonica, and InfraVia signals an effort to bolster market position against competitors like BT's Openreach.
