Virgin Media O2 numbers hit by no-penalty terminations after upping prices

Virgin Media O2 lost 24,700 customers in Q2, a drop the company said was expected due to the absence of a provision for price hikes in contract that means customers can cancel after price rise notifications.

Unlike other UK service providers, Virgin Media has not put a provision in contracts that allows it to up prices in line with inflation, meaning its customer do not have to pay an penalty to terminate their contracts.

The UK service provider lost 15,300 broadband customers and 1,500 contract mobile customers in the quarter. On the positive side, it said that 1.5 million customers were now taking one of its converged fixed-mobile Volt bundles.

VMO2 is meanwhile to axe a reported 2,000 jobs as a result of mounting cost pressures that have also led other UK telcos including BT and Vodafone to implement staff cuts.

The job cuts amount to about 10% of the company’s workforce.

The company said it had invested over £500 million in its infrastructure in the quarter out of £23 billion to be invested across the whole year. It built out fibre to a further 175,500 premises, mostly via its nexfibre joint venture of whichVMO2 is the anchor tenant, meaning it can now reach 16.4 million homes with fixed line services, or 58% of the UK total.

The company’s full fibre footprint now stands at three million homes, to be extended to about four million by he end of the year.

““As we navigate a tough economic climate, we have a clear long-term strategy and continue to deliver for customers. Amidst higher costs, rising usage and continued investment, we executed necessary price increases in line with our expectations with this starting to flow through to our Q2 revenue and EBITDA growth,” said CEO Lutz Schüler.

“Demand for our award-winning connectivity remains, and our significant network investments and service improvements ensure we can meet all customer needs today while preparing for the decades ahead.  For the rest of the year we remain focused on building commercial momentum, realising the synergies of the Joint Venture and future proofing our networks.”