Virgin Media hopes convergence will build on mobile gains

Virgin Media hopes a new range of fixed mobile convergence (FMC) products will increase revenues and improve customer churn after reporting a slight increase in mobile subscribers in Q2.

The company now has 3.15 million mobile users, up from 3.09 million last year, as revenues fell by 1.9 per cent due to lower non-subscription revenues.

This can in part be explained by lower handset revenues caused by longer device refresh cycles.

Virgin Media convergence 

However, a soft launch of FMC started in April and Virgin Media started marketing the products in June. This resulted in 57,000 post-paid additions as cable customers took out a mobile contract. The percentage of converged customers increased from 19.5 percent to 19.9 percent.

Rival BT is also working on converged products that combine the Openreach fibre network, the EE 5G network, and BT’s Wi-Fi network.

On the fixed side, Virgin added 130,000 new premises to its network was part of the ongoing ‘Project Lightning expansion’. Its network now reaches 15.6 million properties, up from 15.1 million last year. A final target has not been revealed, but it is expected to be in the region of 17 million.

Overall revenues for the quarter were £1.28 billion – up 0.4 percent year on year – and the company said that the reaction from customers about an average 4.9 percent price increase alter this year were “within expectations”.

Virgin is pressing ahead with plans to rollout speeds of 1Gbps to all customers by 2021, with one million premises covered by the end of the year.

Crucially, customers will not have to have any physical line upgrades to enable the new speeds, which Virgin Media says will help meet growing customer demand for data-intensive applications such as cloud gaming, 4K and 8K streaming, and Virtual Reality.

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