VMO2 pledges its UK fibre network will reach 23 million premises by 2027
- Will be the ‘anchor tenant’ on a new wholesale fibre access network deployment passing 7 million UK premises and allow other ISPs to use the network
- Puts operator in direct competition to BT’s Openreach division and other wholesale players such as CityFibre
- Latest full year results show VMO2 profits doubled last year
- The ‘customer experience’ also gets attention (at last)
Competition in the UK broadband and mobile market is ramping up even further with the news that Virgin Media O2 (VMO2), which is owned by Liberty Global and Telefónica, is in advanced discussions with potential financial partners to provide external funding to grow its gigabit speed fibre-optic network to pass a further 7 million greenfield premises. VMO2 already passes 15.6 million homes (of which 5.6 million are connected to paying broadband customers). The plan is that the operator will be the ‘anchor tenant’ of the new 7-million household rollout, which will be operated on a wholesale basis: Once that new rollout is completed in 2027, VMO2's fixed broadband access network will reach about 23 million premises across the UK.
VMO2 already offers broadband access speeds of up to 1.1Gbps, which is 22 times the UK national average. BT, the incumbent UK telco, plans to expand its wholesale network (operated by Openreach) to pass 25 million premises by the end of 2026. Meanwhile, comparative upstart CityFibre is rolling out a full fibre network to more than 60 UK towns and cities and is on track to pass 8 million homes and businesses by April this year as part of its £4 billion Gigabit City Investment Programme.
As a direct rival, VMO2 is putting pressure on both BT’s semi-detached wholesale arm Openreach, CityFibre and other competitors and is hoping to maintain its already proven ability to achieve 30 per cent penetration in new-build areas and take advantage of the opportunities provided by the congruence of fixed and mobile services. However, and here’s the sting for its competitors, the ‘anchor tenant’ will open the network for other ISPs to use on wholesale terms. This means the likes of Sky, TalkTalk and others will have another major wholesale option for their broadband service expansion, much of which currently is tied to the UK-wide Openreach network.
The announcement was included in a meaty 13-page release detailing Virgin Media O2’s Q4 figures and full-year results for the 12 months to December 31, 2021. Lutz Schüler, CEO of Virgin Media O2, dutifully burnishing the list of his company’s achievements over 2021, added, “We now plan to extend our footprint to 23 million premises through a new fibre venture being set up by our shareholders.”
Today’s figures show that VMO2 added a further 142,000 fixed customers to its rolls last year and 334,000 new post-pay contracted mobile subscribers. The company’s combined mobile base now stands it 42.2 million. Simultaneously, VMO2 completed its Gig1 broadband rollout and 5G services are now available in 301 towns/cities The operator also delivered £10.4 billion of ‘transaction adjusted’ revenue, and sunk £2 billion of investment into network infrastructure and ‘customer experience’. Profits doubled to £18.3 million. The average Virgin Media broadband speed was 214 Mbps.
As many Virgin Media subscribers will attest the company’s technology is pretty good and its superfast broadband is genuinely that, super fast - and these days it doesn’t fall over very often or for very long when it does. However, its customer relationship management and the customer experience when trying to address issues with the call centres has long been truly dire. One had to take a stiff drink and gird ones loins preparatory to calling and entering a kafkaesque universe that would drain to the dregs the very will to live.
To start with, the call centre agents, if you could actually get through to one (waiting times were unconscionable), usually sounded as though they were calling from a Dalek’s rest and recreation facility on the far side of the moon after one too many pan-galacticgargleblasters, and they made about as much sense. Then followed the old “turn things off and back on again” routine, followed by an hiatus whilst a remote diagnostic text was performed that, amazingly, always found that there was nothing wrong. Either that or you were cut off. Promised callbacks never happened. Email went unanswered. Letters were unacknowledged. It was a hellish experience.
Subscribers will (allegedly) also get better customer service
It’s good, then, to be able to report that “Virgin Media O2 remains focused on enhancing customer experience and sticking to its challenger spirit.” (Bottles of which should, years ago, have been sent out to placate put-upon, aggrieved customers). It’s all very well having a challenger spirit, but the abysmal reality that long characterised Virgin Media’s customer experience certainly challenged far too many of its customers to the point of seething impotent rage. However, VMO2 has now introduced new systems and employed over 1,000 new UK-based “service roles” (and 1,300 new “retail positions”).
In its report, VMO2 says, “Investment in people has meant there are more multi-skilled agents who can handle and resolve queries, more of which are being fixed the first time a customer makes contact. In addition, customer interactions using app and web-based channels to resolve queries is growing and reached over 75 per cent during Q4 and more than 90 per cent are successfully resolved via these channels.”
It continues, “These factors have led to a 93 per cent reduction in Virgin Media complaints and lower call waiting times, with fixed customer relationship NPS (Net Promoter Score) increasing 9 points and transactional NPS improving 16 points for service interactions in the digital care channel from Q1 2021 to the end of Q4 2021." Hoorah! And about time too. If you listen quietly you can hear the breathy sighs of relief across this green and pleasant land.
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