Virgin Media eyes return to revenue growth ahead of O2 merger
Virgin Media has forecast a return to revenue growth this year as it gears up for a £31bn merger with mobile network O2.
The telecoms group reported revenue of £1.3bn in the first three months of the year, up a marginal 0.2 per cent.
Earnings before interest, tax, depreciation and amortisation slipped one per cent to £507m, partly due to costs related to its O2 merger.
The company said it expected a return to growth in 2021 despite regulatory headwinds, while earnings were expected to remain “broadly stable”.
It came after Virgin Media reported a net customer gain of 31,000 in the first quarter, up from a decline of 1,000 in the first quarter last year.
The company also expanded its Project Lightning broadband built to a further 80,000 premises, taking its cumulative total to 2.6m.
Last month the UK competition watchdog gave the green light to Virgin Media’s tie-up with O2, clearing the way for a major new player in the telecoms market.
Virgin Media boss Lutz Schuler will lead the combined company, while O2’s Patricia Cobian will become chief financial officer.
“We’ve hit the ground running this year, sustaining the momentum we saw in 2020 and delivering a rock-solid performance,” Schuler said in a statement.
“The demand for our services has never been clearer. Continued investment and innovation resulted in our strongest first quarter customer additions since 2017, record-low first-quarter cable churn, an acceleration in converged bundle growth and a 300 per cent boost in new broadband subscribers.”
It came as parent company Liberty Global beat expectations to post first-quarter revenue of $3.6bn, up more than 25 per cent year on year.
Liberty said its convergence strategy added 80,000 broadband customers and 146,000 postpaid mobile subscribers.