Ahmed Sherif
Research expert covering IT services and gaming hardware
Virgin Media O2 UK - statistics & facts
Have you ever wondered how much the telecommunications industry in the UK has transformed in the past few years? From the rollout of 5G networks, the impact of Brexit, to the launch of major joint ventures, the sector has undergone significant change and upheaval. One such venture that has caught everyone's attention is the 2021 merger of Virgin Media and O2 Holdings by Liberty Global and Telefónica, respectively, forming VMED O2. Since then, VMED O2 became one of the largest telecommunications companies operating in the UK, offering broadband, television, mobile, and landline services.
Despite the high revenues, VMED O2’s operating income has been fluctuating in recent years, with the company taking a hit in 2023 with an operating loss of nearly 2.5 billion British pounds. VMED O2’s latest operating loss can be attributed to a combination of a large goodwill impairment, rising debt costs, and tighter cash flows.
VMED O2 faces strong competition across business sectors, with BT the leading player in many key sectors. In broadband, BT commanded around a third of the share of fixed subscribers in the UK in 2022, while Sky accounted for roughly 23 percent. Virgin Media is the third-largest player in that market with a share of 20 percent of subscribers. BT is also the largest player in fixed-line calls, accounting for 12.3 billion minutes of calls in 2022 against Virgin Media’s 3.3 billion.
Although the joint venture between VMED O2 significantly strengthens the positions of both Liberty Global and Telefónica in the British telecommunications market, and indeed has increased the company’s revenue considerably, BT and Sky remain formidable competitors. As a result, it is unlikely that VMED O2 will surpass them in subscriber count and market share anytime soon.
Virgin Media and O2 mount a challenge to BT and Sky
News of a potential merger between Virgin Media and O2 first broke in May 2020, with the deal framed as a means of competing against competitors BT and Sky. The deal was cleared by the UK’s competition authorities in April 2021, with the merger completed two months later. In the financial year 2022, the first full year of trading after the merger, VMED O2 reported a revenue of almost 10.4 billion British pounds, increasing to 10.9 billion British pounds in 2023. By comparison, Virgin Media’s annual revenue for 2019 was only 5.2 billion British pounds.Despite the high revenues, VMED O2’s operating income has been fluctuating in recent years, with the company taking a hit in 2023 with an operating loss of nearly 2.5 billion British pounds. VMED O2’s latest operating loss can be attributed to a combination of a large goodwill impairment, rising debt costs, and tighter cash flows.
BT remains a market leader
VMED O2’s largest business segment by revenue is its mobile segment, with revenue for the 2023 financial year reported as nearly six billion British pounds. In the same year, the company’s fixed-line revenues amounted to 3.9 billion British pounds, the majority of which is attributed to consumer subscriptions, while around 554 million British pounds is attributed to business-to-business (B2B) revenue.VMED O2 faces strong competition across business sectors, with BT the leading player in many key sectors. In broadband, BT commanded around a third of the share of fixed subscribers in the UK in 2022, while Sky accounted for roughly 23 percent. Virgin Media is the third-largest player in that market with a share of 20 percent of subscribers. BT is also the largest player in fixed-line calls, accounting for 12.3 billion minutes of calls in 2022 against Virgin Media’s 3.3 billion.
Although the joint venture between VMED O2 significantly strengthens the positions of both Liberty Global and Telefónica in the British telecommunications market, and indeed has increased the company’s revenue considerably, BT and Sky remain formidable competitors. As a result, it is unlikely that VMED O2 will surpass them in subscriber count and market share anytime soon.
