This follows the rollout of AI tools and changes to its customer contact operation.The operator claims it cut 1.45 billion seconds from call handling times in 2025 after reducing call transfers by 1.3 million year on year,

Customer service has been a weak spot for the combined business since the Virgin Media–O2 merger pushing ithigh in Ofcom’s league tables, particularly for mobile and pay-TV issues. In 2024, O2 generated 23 complaints per 100,000 mobile customers, the highest among major networks.

Historically, callers were forced into a maze of rigid keypad menus before being routed to a department, often to be transferred again if their query did not fit neatly into a single category.

Virgin Media O2 says that experience is now changing. Most customers are asked to explain the reason for their call at the outset, with AI-driven Natural Language Understanding technology assessing intent and routing the call to the appropriate agent first time. The system is already live across large parts of the business, with a full rollout planned.

The company has also reviewed where call transfers were most common and simplified team structures. Around 5,000 customer service agents have been cross-trained to deal with a wider range of issues without transferring calls.

Alan Stott, Alan Stott, Director of Customer Contact at Virgin Media O2, said the focus has been on reducing unnecessary friction.

“Nobody enjoys spending their time on the phone, particularly when they’re being transferred between teams,” he said. “Where customers do need to contact us, our priority is to make that experience as simple and efficient as possible.”

The customer service improvements form part of a broader turnaround strategy outlined last year by chief executive Lutz Schüler.

Virgin Media O2 says the spectrum acquisition is extra to the £2 billion-plus it has already invested in its networks and services.

The purchase will be partially funded by the operator’s sale of a minority stake in Cornerstone, the mobile infrastructure joint venture, completed in 2024. Payment for the spectrum will be spread beyond 2025, with rollout of the new capacity beginning this year and continuing over the medium term.

The network expects the additional spectrum to support improved mobile coverage, increased capacity and faster speeds across its footprint. Wholesale partners using Virgin Media O2’s infrastructure – including numerous MVNOs – are also set to benefit from the network enhancements.

The move, announced today, follows the completion of the merger between Vodafone UK and Three UK, and is subject to regulatory approval from Ofcom.

The spectrum transfer will improve Virgin Media O2’s network performance and capacity and boost Virgin Media O2’s total spectrum share to around 30 per cent.

The deal is part of a broader agreement between Virgin Media O2 and Vodafone UK reached in July 2024. This includes a commitment to extend and enhance their existing mobile network sharing partnership for more than a decade. Under the new arrangement, the merged Vodafone-Three entity will also join this network sharing agreement, further integrating infrastructure across the UK mobile landscape.

Virgin Media O2 CEO Lutz Schüler said:
“This acquisition of spectrum will not only create greater balance in holdings across the UK’s mobile networks, but for Virgin Media O2 it will allow us to boost coverage and further improve our network quality, building on the significant investment we are already making in our mobile network. We’re committed to giving our customers a reliable mobile experience across the country and this increase in spectrum will help us deliver on that.”

Complaints from O2 customers between October and December were related to how the company handled their issues.

In contrast, EE, Sky Mobile and Tesco Mobile were the least complained-about providers during the same period.

Ofcom’s Policy Director, Fergal Farragher, described the overall data as showing a “positive overall pattern,” highlighting a drop in complaints across three of the four main telecoms services tracked. However, he also cautioned that the picture is not entirely positive.

“We’re pleased to see this, but we also note that some providers have seen complaints about them increase over the previous quarter. “This means it’s not an entirely positive set of figures, so we’re keen to see further improvements across all providers and services.”

Virgin Media O2 has initiated a comprehensive strategy to improve its customer service. This includes nearly doubling its investment in customer support, increasing the number of care agents to over 9,000, and establishing a UK-based specialist team of 500 agents in Manchester to handle complex cases.

Ofcom regularly publishes complaint data to monitor consumer satisfaction and highlight areas of concern. While the regulator does not resolve individual complaints, it says these figures offer important insights and help consumers make informed choices when selecting a telecoms provider.

Virgin Media O2’s CEO, Lutz Schüler, acknowledged the need for continued progress, stating that while most are satisfied, the company is committed to delivering consistently exceptional service. The company plans to continue its focus on simplifying systems, upskilling agents, and addressing persistent customer pain points.

]]> https://mobilenewscwp.co.uk/news/article/o2-tops-ofcom-customer-complaints-report-q4-last-year/feed/ 0 https://mobilenewscwp.co.uk/news/article/virgin-media-o2-mobile-revenue-dips-slightly-consumer-margins-improve/ https://mobilenewscwp.co.uk/news/article/virgin-media-o2-mobile-revenue-dips-slightly-consumer-margins-improve/#respond Fri, 02 May 2025 10:43:19 +0000 https://mncwp.tailrd.cloud/virgin-media-o2-mobile-revenue-dips-slightly-consumer-margins-improve/ Virgin Media O2’s total mobile revenue for Q1 fell by 1.1 per cent year-on-year to £1.35 billion. 

Virgin Media O2’s total mobile revenue for Q1 fell by 1.1 per cent year-on-year to £1.35 billion. 

This was mainly due to a 6.6 per cent drop in low-margin handset revenue. However, mobile service revenue saw modest gains, supported by recent price increases.

The mobile contract base declined by 122,800 connections during the quarter, driven by churn among lower-value B2B customers. In contrast, Virgin Media O2 reported an improved performance in the consumer mobile segment compared to Q1 2024.

Consumer fixed services support growth

Consumer fixed revenue rose by 1.9 per cent to £838.4 million, helped by a 1.6 per cent increase in average revenue per user (ARPU). This growth came despite a net loss of 46,000 fixed-line customers, as aggressive discounting across the market drove up churn.

Excluding the costs associated with building the joint venture new fibre network, nexfibre, the company posted a profit of £921.7 million—up 0.8 per cent year-on-year. Including nexfibre, overall profit declined by 1.3 per cent to £914.1 million.

Lutz Schüler, CEO of Virgin Media O2, commented:

“We have started the year on track with our guidance, delivering growth in core revenues and profitability. Despite a tougher Q1 trading environment, we’ve remained focused on retaining customer value through fast and reliable connectivity, disciplined pricing, and improved service.

“Our investments in networks and services continue to position us well for the future. We’ve seen further improvements in customer service as our turnaround strategy gains momentum, with lower complaints and higher satisfaction.

“On the mobile side, we’ve expanded 5G to reach three-quarters of the UK population and improved network quality in key areas. The expected acquisition of spectrum from Vodafone-Three will further strengthen our position.On the fixed side, our combined full-fibre footprint is approaching seven million premises. We’re also starting trials of giffgaff broadband to further extend our market reach.”

Full earnings details HERE

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The company’s contract base now stands at 15.8 million , with 16,000 net additions in Q4 , marking a return to growth. However, across the year, there was a decline of 216,000 contract customers . Monthly contract churn improved to 1.1 per cent , reflecting stronger customer retention compared to the previous year.

Lutz Schüler, CEO of Virgin Media O2 Main pic), highlighted the company’s commitment to long-term growth, saying:

 “We said 2024 was a year of investing to support our long-term growth, and these results reflect that. We close the first chapter of Virgin Media O2 having delivered our full-year guidance and hitting our JV synergy targets 18 months ahead of schedule , meaning we are well set for the future.”

Schüler also pointed to the company’s continued fixed customer and ARPU growth , along with improved customer satisfaction through a focus on service experience.

“In 2024, over £2 billion was invested in expanding 5G coverage, improving network quality, and enhancing rural connectivity . Virgin Media O2 also accelerated the expansion of its fibre footprint , reinforcing its leadership in gigabit broadband and advancing its partnership with nexfibre to become the UK’s leading fibre challenger. The results mark a strong close to the year for Virgin Media O2, positioning the company for further network enhancements and customer growth in 2025″

Whether it’s offering ultrafast gigabit broadband right across our national network, rewarding our customers with exclusive access and perks through Priority, or delivering innovative mobile offers like inclusive EU roaming, our customers rightly have high expectations of us.

£5 million daily investment

We invest more than £5 million every day to improve, maintain and expand our services and ensure we give customers what they expect. Most customers benefit from this, receive excellent value and are satisfied with their services.

But we also know that when it comes to how we serve our customers and how we support them when they need help, we have more work to do in some areas.

Complaints data published by the regulator Ofcom over recent months and years, and indeed our own data, has shown that some customers don’t always get the fast and efficient support they expect. We know that needs to change and we are on the path to doing that.

While I’m pleased that the vast majority of our customers are satisfied with the service they receive, we are committed to doing better. Our goal, which we’re already backing with increased investment, is to provide consistently exceptional service and give all our customers greater confidence that if an issue does arise, they will be able to contact us easily and we’ll be able to provide a speedy resolution. Basically, if there’s a problem we’ll fix it quickly, simply and with no hassle.

That is why, last year, we drew a line in the sand and implemented a comprehensive strategy to transform customer service. It’s focused on four main areas:

1) Targeted investment: We are nearly doubling investment in customer service and targeting it to the areas that will make the biggest difference. We’ve boosted the number of care agents to over 9,000 today, including recruiting into specialist teams that handle the most complex queries, and we’re investing in new IT tools so that agents can more easily access the information they need to help resolve issues first time.

2) Simplifying systems and processes: We’re creating a single customer services function that will see agents able to support all Virgin Media and O2 customers. Today, too often customers are passed between teams so we’re going to simplify so that our agents can better support customers with whatever they need help with. This will take some time, but in future, customers will dial a single number and wait in one queue to get help with their broadband, TV, landline or mobile.

3) Upskilling customer agents: We’re providing additional training to our 9,000 agents, meaning the vast majority of customer queries – from service issues to billing enquiries, broadband sales to mobile upgrades – can be resolved first-time by our multi-skilled agents. In-store teams will also receive additional training so they can take greater ownership of customer issues and resolve things there and then. We’ll also roll out new AI tools – not to replace our human agents, but to help them be the best they can be – and allow them to spend more time helping customers.

4) Removing persistent pain points: We’ve carried out forensic analysis of thousands of historic complaints to identify the root cause of customer issues so we can tackle things that consistently frustrate our customers. These changes can be small things like changing how we handle fraud issues or ensuring that our field techs have boosters to hand when installing new customers so any blackspots can be resolved there and then. But they can be big things, too, like the investment we’ve made in Smart Support technology that will help identify, diagnose and resolve broadband issues before a customer even reports a fault to us.

There isn’t a simple overnight fix. It will take time to get to where we want to be, and there may be bumps on the road, but we’re already seeing some real tangible progress.

In the past three months, 92% of complaints raised were resolved within 24 hours, and by the end of last year we reduced the number of Ofcom complaints by 48% compared with the average monthly run rate in 2023, surpassing the ambitious 40% target we set ourselves. In December, complaints relating to Virgin Media were at the lowest levels since 2017, while complaints about O2 hadn’t been lower for two years. We expect these latest improvements to be reflected in future Ofcom statistical releases.

Away from complaints data, we’ve reduced call transfers for both Virgin Media and O2 customers by 18% and 12% respectively since the start of 2024, while average call waiting times reduced from two minutes in 2023 to 44 seconds in the past three months, and just 20 seconds in January alone.

These green shoots give me confidence that we have the right plan in place to transform customer service and will get to where we want to be.

For all the millions of pounds we invest in our networks, for the success of our fibre rollout, for the great value we offer through Priority and inclusive EU roaming, I know that ultimately what matters most to customers is the service they get from us. We remain laser-focused on living up to our customers’ expectations and we are on track to get this right for good

The affiirmatiom was made by Lutz Schüler,CEO of Virgin Media O2 announcing the networks Q2 financial performance.

 Virgin Media O2 and Vodafone UK have a new, long-term mobile network sharing agreement which would include sharing spectrum from a merged Three and Vodafone.

In itus Q1 figures Virgin Media O2 disclosed it how  has 23.4 million mobile connections, including a contract base of 15.9 million the network revealed in announcing its Q2 figures.

There were 403,100 connections in Q2 from IoT and MVNO operators such as Sky and Tesco. Total mobile revenue decreased by 6.4 percent to £1,398.1 million, mainly due to low-margin handset revenue, which decreased by 19.5 percent.

The contract base dropped by 118,400 connections in Q2 due to lower activity at the premium end of the market. O2’s monthly contract churn was stable at 1.2 percent.

5G mobile connectivity covers almost two-thirds of the UK with improved remote coverage under the Shared Rural Network scheme. Outdoor 5G coverage now reaches two-thirds of the UK population following the switch-on of next-generation 5G Standalone in the first quarter. The company says it is on track to bring 5G to all populated areas by the end of 2030, while continuing to invest in increasing mobile network capacity and improving rural connectivity.

Tough trading environment

“Despite a tough trading environment, we remained focused on delivering more for our customers, continuing to invest significantly in our networks and services, to the level of more than £1 billion so far this year, and successfully executing price changes”, said Schüler

“We have maintained consumer fixed and mobile revenue excluding handsets, with overall revenue impacted predominantly by mobile hardware headwinds, and profitability is on track and in line with our full-year guidance, Our fibre deployment has gathered significant pace, with the Virgin Media O2 fibre footprint now hitting five million premises as we push forward towards creating the UK’s largest national fibre challenger”.

The agreement will be an irresistible carrot for the Competition and Markets Authority to approve the merger,

The Agreement includes plans for Virgin Media O2 to purchase spectrum at market value from MergeCo, increasing their current holding. The Agreement reduces the current imbalances in spectrum holdings between the UK’s mobile network operators, which will enhance competition in the mobile market, allowing MergeCo and Virgin Media O2 to provide increased capacity, speeds, and greater coverage for their customers.

Vodafone says the new sharing agreement will benefit Virgin Media O2 and MVNO customers who will enjoy improved coverage from Vodafone and Three’s planned £11 billion network investment. As long as the merger goes ahead, the operators have agreed that Virgin Media O2 will get spectrum from the merged network, establishing three scaled mobile network operators, each with better alignment of spectrum holdings.

A joint statement noted:

“Through a combination of MergeCo’s commitment to invest £11 billion in its network over the next decade (subject to CMA approval) and Virgin Media O2’s £2 billion annual investment in its networks and services, the Agreement will ensure quality mobile connectivity, choice, and competition is enhanced.

“This will not only benefit the companies’ respective customers but also businesses, including MVNOs who use networks via wholesale partnerships to deliver their own mobile services to millions of people across the country. The Agreement will ensure these virtual operators have access to a choice of three high-quality, scaled wholesale competitors, further supporting an already thriving MVNO segment in the UK.”

These benefits extend to both retail and wholesale MVNO customers.

Ahmed Essam, CEO, European Markets, Vodafone, said: “With this agreement and our merger with Three, we will transform the mobile experience for over 50 million customers in the UK for the long-term, providing significant network improvements including more choice, better quality, and greater coverage across the country. These benefits extend to both retail and wholesale MVNO customers. The proposed merger, together with this agreement, will boost competition by establishing a strong third player in the UK mobile market and will improve the balance of spectrum holdings, leveling the playing field between the UK’s mobile operators.”

Lutz Schüler, CEO of Virgin Media O2, said: “This new agreement with Vodafone ensures that quality mobile network choice, performance, coverage, and competition are enhanced to the benefit of millions of consumers, businesses, and our mobile operator partners across the country. We are extending and bolstering elements of our existing network sharing arrangement, while also ensuring there is a robust, balanced, and functional structure in place for the long-term should Vodafone and Three’s proposed merger gain consent. We believe that this new agreement addresses the issues we have voiced and the CMA outlined in its initial decision, and we will now continue our engagement with the regulator in this spirit.”

—

Virgin Media O2 now has 24 million mobile subscribers on both contract and pre-paid deals.

The mobile base last year increased by 46,600 contract customers and 211,200 IoT and wholesale connections. The converged fixed-mobile Volt bundles also saw growth, with 1.9 million customers opting for these services.

The company invested over £2 billion in 2023 expanding its fibre and 5G networks. Around 833,100 premises connected to the fibre network, with more than four million premises now passed with fibre from Virgin Media O2 or nexfibre. Its 5G network covers more than half of the UK population.

Virgin Media O2 reported stable revenue of £10.9 billion, up 5.2 per cent year-on-year. The company’s EBITDA also saw growth, reaching £4.1 billion, a 5.0 per cent increase from the previous year. Adjusted free cash flow rose to £722 million, marking an 8.4% increase.

Virgin Media O2 says it plans to focus on key investments in sales, marketing, and digital/IT efficiencies to support mid-term growth drivers. The company anticipates stable to declining revenue but plans to maintain investment levels between £2.0 billion to £2.2 billion.

Lutz Schüler, CEO of Virgin Media O2 said:  “We ended the year with stable revenues in line with our revised guidance at Q3, and achieved the low end of our EBITDA growth guidance through accelerated synergy execution which offset the impacts of consumer spend optimisation. We also continued trading momentum with mobile and fixed customer growth, supported by sustained customer-first initiatives like inclusive EU roaming and our O2 Priority loyalty scheme. 

“The 2024 outlook will be impacted by incremental investment in key initiatives to drive future growth, including increased marketing across our rapidly expanding fixed footprint, new commercial initiatives and wider digital and IT efficiency programmes. We remain focused on delivering against our core strategy and these key investments will help us to lay down strong foundations for future success.”

Tesco Mobile now has a customer base of over 5.5 million users.

Lutz Schüler, CEO of Virgin Media O2, commented “
“We have enjoyed great success with Tesco Mobile over the past 20 years, as a partner and a network provider, and I have no doubt that will continue over the next decade. With demand for mobile data greater than ever, we’re continuing to invest heavily in our network to give our customers, and those of other providers who use our connectivity, an even better experience with the fast and reliable mobile services they expect and rely on.”

The MVNO stared as a 50:50 joint venture between Tesco Plc Group and Telefónica UK, Tesco Mobile’s ownership shifted to a shared arrangement with Virgin Media O2 following the merger of Telefónica UK with Virgin Media on 1 June 2021. T