Virgin Media O2 sees earnings fall after mobile phone price hikes

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Virgin Media O2 (VMO2) has issued a stark warning to investors, forecasting a significant drop in earnings for 2026 following a year marked by heavy customer losses and a decelerating fibre rollout.

The telecoms giant revealed that it lost nearly 400,000 mobile customers and 138,000 broadband users in 2025, as aggressive price hikes took a visible toll on its subscriber base.

The group’s financial outlook for the year ahead anticipates a decline in underlying earnings of between 3 percent and 5 percent. Chief Executive Lutz Schüler acknowledged the “challenging market conditions,” citing heightened promotional intensity and ongoing uncertainty in the consumer market as primary drivers for lower sales projections.

A major factor in the customer exodus was the October announcement of a substantial price hike for mobile users, which triggered a net loss of 164,800 contract mobile connections in the fourth quarter alone.

On the fixed-line side, the company shed 16,700 broadband customers in the final three months of the year, bringing total broadband losses for 2025 to over 138,000.

Simultaneously, the pace of VMO2’s infrastructure expansion has begun to cool. The group’s gigabit broadband coverage increased by 115,100 premises in the fourth quarter, a notable drop from the 139,000 recorded in the previous quarter.

Much of this build-out relies on nexfibre, a joint venture between VMO2’s parents and InfraVia Capital Partners, which is currently navigating its own strategic hurdles.

In a move to regain momentum, VMO2’s parent companies – Liberty Global and Telefonica – announced a £2 billion deal to acquire the British alternative fibre firm Substantial Group, which includes the Netomnia network.

While the move is intended to strengthen VMO2’s position against BT’s Openreach, it has already drawn fire from rivals. CityFibre has called for a thorough investigation by the Competition and Markets Authority (CMA), warning that the merger could re-establish an “ineffective duopoly” and stifle consumer choice.

As the company braces for a difficult 2026, it plans to implement cost-saving measures to offset falling revenues, even as it continues its ambitious plan to upgrade its entire legacy network to full fibre by 2028.

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