Liberty Global offloading non-core assets isn’t the only bit of news coming out of the offices today as Virgin Media’s Project Lightning continues to defy its name.
Financials for the quarter were pretty positive overall, revenues for the UK and Ireland grew 5.2% (rebased) to $1.77 billion, while the team boasted of a 25,200 net gain of mobile subscribers. On the more disappointing side of the quarter was Project Lightning.
Over the course of the three months, 111,000 marketable premises were added to the roster, taking the total to 1.2 million since the launch. While this might sound positive, this is the slowest progress for the last four quarters and let’s not forget the aim is to take this number to 4 million by the end of 2019; this isn’t the most rapid rollout we’ve ever seen.
Missing this target is not necessarily the end of the world, it was after all a self-imposed one, but it does perhaps indicate a bit of internal lethargy. Again, not exactly hit the panic button time if it was only measuring itself against the cumbersome BT, but the emergence of Vodafone as a challenger ‘altnet’ in the broadband game perhaps makes it a worrying situation. Progress has been sluggish (putting it politely) when compared to the Vodafone/CityFibre partnership which is tearing up roads left, right and centre to add cities to the growing list of gigacities, targeting 5 million connections over the next eight years.
Of course bringing Vodafone into the conversation is entirely appropriate considering the acquisition announcement which has recently been made. Aside from Liberty Global’s German and Eastern European assets, Virgin Media is also a name which has been whispered in the dark corners of the rumour mill, though this does not look like a bit of business which will be hitting the headlines any time soon.
“Virgin Media is not on the agenda,” said Vodafone CEO Vittorio Coloa during a briefing on the wider acquisition. The UK business is laser-focused on the development of its own convergence objectives, a worrying sign for Virgin Media.
Looking at the figures, Virgin Media currently has just over 5 million subscribers, bringing on an extra 32,000 over the quarter. This is a respectable number, but for this to continue upwards in the long-term, Project Lightening will have to start proving it is worth the paper it is written on.
On the mobile side of things, the message is slightly better. Although the number of prepaid subscribers declined by 44,000, 69,000 were acquired for the more lucrative postpaid subscriptions. The total number of mobile subscriptions now stands at just over 3 million.
Virgin Media isn’t doing badly, but it is hardly setting the world on fire. The broadband business might have been able to position itself as the alternative to Openreach in years gone, but with Vodafone about to turn the lights on in its own gigacities, the team will have to prove it is more than just an alternative for alternatives sake. At the moment it is doing its own ‘Gap Yah’ impression. Momentum is gathering for Vodafone and it looks to be a threat to the sluggish mainstays of the broadband world.