Virgin Media O2 has issued a stark warning over its financial performance for 2026, forecasting significant declines in both sales and earnings following a substantial loss of customers linked to recent price increases. The telecoms giant revealed a net loss of 397,500 mobile subscribers in the past year, alongside 138,400 broadband customers in 2025, as consumers react to higher costs.
Financial Forecast and Customer Attrition
The company's annual results showed a 0.4 per cent decline in underlying earnings, with projections indicating a further 3 per cent to 5 per cent drop in underlying earnings and total service revenues for the upcoming year. This downturn is directly attributed to the customer exodus, which has been exacerbated by a planned £2.50 monthly increase for mobile customers set to take effect in spring 2026.
Factors Behind the Decline
Virgin Media O2 points to several key factors driving the lower sales outlook. These include heightened promotional intensity in the market, ongoing uncertainty within the consumer fixed market, and a strategic streamlining of its business-to-business product portfolio. The company emphasised that these elements, combined with the price hikes, have created a challenging environment for growth.
Strategic Moves and Competition Concerns
In a bid to bolster its position, Virgin Media O2, along with partners Liberty Global and Telefonica, recently acquired British fibre firm Substantial Group for £2 billion. However, this acquisition has sparked competition concerns from rivals such as CityFibre, who argue it could stifle market diversity and innovation.
Martin Lewis, the consumer finance expert, has issued urgent advice to millions affected by the O2 price hike, urging customers to review their contracts and explore alternatives to mitigate the financial impact. His guidance highlights the broader consumer discontent with rising telecom costs.
Overall, Virgin Media O2's struggles underscore the delicate balance telecom providers must maintain between revenue generation and customer retention in an increasingly competitive and price-sensitive market. The coming year will be critical as the company navigates these headwinds while implementing its strategic initiatives.
