VMO2 sees revs drop but hits subs milestone in Q2

As it deals with continued pressure on consumer fixed comms lines and the impact of planned streamlining of its business product portfolio – namely the O2 Daisy transition – Virgin Media O2 (VMO2) has revealed a challenging second quarter of the year, with total service revenue decreased 3.9% in the quarter, 3.5% for the half-year. However, it has achieved a landmark for full-fibre premises passed.

For the quarter ended 30 June 2026, total revenue tumbled 7.9% on an annual basis – adjusted for the Daisy transaction – to £2.399bn, with total service revenue of £2.043bn, a 3.9% year-over-year decrease again adjusted for the business line, which is now known as O2 Business. Adjusted for the Daisy transaction, adjusted EBITDA was £975, down 2.9% on an annual basis, while adjusted free cash flow was £232m.

The totals are said to be a consequence of consumer revenue decreasing 5%, reflecting a lower customer base and consumer fixed ARPU pressure, with a 6.2% decrease in consumer fixed service revenue and a 1.9% reduction in consumer mobile service revenue. Consumer fixed revenue continued to reflect targeted retention activity in a highly competitive market; the phasing of annual price rises implemented in 2025 also negatively impacted the year-over-year comparison in the quarter.

Business revenue decreased 8.7%, due to a 10.9% reduction in business service revenue, driven by the planned streamlining of the B2B product portfolio and market headwinds. In addition, wholesale revenue decreased 0.5%, driven by lower Smart Metering revenue. However, wholesale service revenue continued growth, with a 5.4% year-over-year increase supported by ongoing MVNO momentum.

In addition, approximately £14.7m of fixed pre-enablement and installation income improved wholesale service revenue, as the company targets scaling and expanding wholesale fixed services.

Overall, network construction and other revenue decreased 95.9%, reflecting the expected reduction in low-margin construction activity at VMO2’s Nexfibre line.

In terms of customers, VMO2’s total consumer fixed customer base stands at 5.5 million, with a 30,000-customer reduction in the second quarter of 2026. This represented an improvement of around 23,000 compared with the same period in 2025. Virgin Media O2’s full-fibre footprint reached the milestone of nine million premises, including the Nexfibre network, while all 18.8 million homes serviceable can access gigabit speeds.

In the mobile comms domain, total mobile connections across the O2 network stand at 46.4 million. This total includes O2, Giffgaff, O2 Business, IOT, and MVNOs such as Sky and Tesco Mobile.

At the end of the quarter, total mobile contract connections stood at 24.5 million, falling by 29,000 in the three-month period.

Consumer mobile contract ARPU remained stable. The wholesale contract connections base increased by approximately 34,000 in Q2, reinforcing its strong position in the mobile wholesale market.

For VMO2 CEO Lutz Schüler, the results reflect a continued navigation of a highly competitive market backdrop, a focus on execution and transformation in three operating areas – consumer, B2B and wholesale.

“Our performance in Q2 is in line with our full-year guidance – and a relentless commitment to improving customer experience and building strong foundations for future growth,” he said.

“Underpinned by significant investment, we are making good progress against our long-term strategy with a fibre footprint reaching nine million premises; the largest 5G+ network in the country; the expansion of innovative new services like O2 Satellite; a new wholesale partnership; and a clear transformation of our customer service, with faster issue resolution and significantly lower complaint levels.”