Cable ISP Virgin Media (Liberty Global) has posted their latest results for the first quarter of 2019, which saw their UK cable broadband and TV network grow its coverage by another 102,000 premises and their total internet access base add +35,000 new customers to total 5,259,600 (up from the 21.7k added in Q4 2018).
Since the last set of results we’ve seen Virgin Media launch their new top 500Mbps ultrafast broadband package using their existing EuroDOCSIS 3 network (here) and they’ve proposed to introduce a new Gigabit speed service across two UK cities (here), which will use the new DOCSIS 3.1 technology. The latter is also likely to be accompanied by a new Hub 4.0 broadband router (possibly the Gigabit Connect Box).
Meanwhile the operator has also moved to upgrade the WiFi capabilities of their existing Hub 3.0 cable router (here) and they’ve replaced their CEO (here). Otherwise today’s results reveal that the pace of their £3bn Project Lightning network roll-out decreased during the first three months of 2019, which saw them add 102,000 extra premises to their network coverage (over 1.7 million UK premises have now been added since 2015/16).
Project Lightning Rollout Since 2017
Q1 2019 = 102,000 Premises
Q4 2018 = 144,000 Premises
Q3 2018 = 109,000 Premises
Q2 2018 = 118,000 Premises
Q1 2018 = 111,000 Premises (likely impacted by heavy snow)
Q4 2017 = 159,000 Premises
Q3 2017 = 147,000 Premises
Q2 2017 = 127,000 Premises
Q1 2017 = 102,000 Premises
NOTE: Q1 is traditionally a slower quarter for build.
The original aim of Project Lightning was to cover 4 million additional premises (17 million total or c.60%+ of the UK) by the end of 2020 (later revised to 2019 before it was discovered in 2017 that they’d erroneously overstated progress), although c.2.1 million+ now seems to be a safer bet for the end of 2019 and possibly 3 million+ at a later date (here).
However, one key point about today’s news concerns the proportion of “full fibre” being deployed. During 2018 around 60% of Virgin Media’s roll-out (480,000 premises) was done with Fibre-to-the-Premises (FTTP) technology via Radio Frequency over Glass (RFoG) instead of Hybrid Fibre Coax (HFC). By comparison 86% of their total infill build was full fibre in Q1. Virgin has previously pledged to do a rough 50/50 style split of HFC to FTTP deployments, although they initially started out with a greater proportion of HFC.
Mike Fries, CEO of Liberty Global, said:
“On the innovation front, we are pushing the envelope in the U.K. In April, we rolled out compelling new fixed-mobile converged bundles, boosted our top broadband speed to 500 Mbps and launched Intelligent WiFi, a cloud-based adaptive system that’s designed to significantly improve our customers’ inhome WiFi experience.
Our Q1 ARPU performance at Virgin Media was impacted by lower install and telephony usage revenue, the timing of certain PPV events and increased promotions in response to market dynamics. However, our competitive position remains strong and we continue to extend our reach with Project Lightning, where we are building 400,000-500,000 new premises every year.”
Meanwhile the operator also confirmed that they had a total Mobile (EE MVNO) customer base of 3,030,600 (down from 3,039,500 in the last quarter) and 79% of their broadband base is now on an ultrafast (100Mbps+) capable package (up from 78%).
We should also add that they have 4,617,300 telephone customers in the UK (up from 4,571,200) and 3,846,700 video / TV users (down from 3,872,000). On top of that 74% of their broadband base is using the Hub 3.0 / SuperHub v3 router (up from 72%) and 60% of their video/TV base uses their V6 set-top-box (up from 57%). We also note that VoIP services are now “available across our U.K. cable footprint” (up from 42%).
Going forward we’ll be on the lookout for the expected boost to upload speeds, a new Hub 4.0 router and their first DOCSIS 3.1 based Gigabit cities deployments. All of which should be taking place during 2019.
Small correction. 102K premises not 107K.