Virgin Media O2 Forecasts Profit Decline for 2026 Following Significant Customer Attrition
The telecommunications conglomerate Virgin Media O2 has issued a stark warning regarding anticipated reductions in both sales and earnings for the year 2026. This caution follows the revelation of substantial net losses in its mobile customer base, a situation exacerbated by recent price increases implemented by the company.
Steep Customer Losses in Mobile and Broadband Segments
According to the firm's annual disclosures, Virgin Media O2 experienced a net loss of 397,500 mobile customers throughout the 2025 calendar year. A particularly sharp decline of 164,800 customers was recorded in the final quarter, a drop largely attributed to price adjustments on O2 mobile plans.
In a parallel development, the company's broadband division also faced challenges, shedding a net total of 138,400 customers in 2025. This included a loss of 16,700 subscribers in the last three months of the year.
Price Hikes and Financial Performance
The customer exodus coincides with the company's decision to raise prices. Initially planning a £1.80 monthly increase, Virgin Media O2 ultimately announced in October 2025 that it would impose a £2.50 per month hike for its 15.6 million mobile customers, effective from spring 2026.
Financially, the group reported underlying earnings of £3.9 billion for 2025, marking a slight 0.4% decrease year-on-year. The fourth quarter alone saw a more pronounced 2.4% drop in earnings. When excluding the impact of its recent merger with business-to-business provider Daisy Group, the figures show a modest 0.9% annual earnings increase, countered by a 1.3% decline in the final quarter.
Gloomy Outlook and Strategic Response
Looking ahead, Virgin Media O2 has guided towards a further deterioration in its financial health for 2026. The company anticipates a 3% to 5% decline in underlying earnings, excluding the Daisy acquisition, with underlying total service revenues expected to fall by a similar margin.
The firm attributes this pessimistic forecast to "challenging market conditions", including heightened promotional competition and ongoing uncertainty within the consumer fixed-line market. Additionally, a planned streamlining of its business-to-business product portfolio is expected to contribute to the lower sales outlook.
In response, Virgin Media O2 has announced plans to implement significant cost-saving measures to mitigate the financial impact. This strategic shift includes the elimination of approximately 2,000 jobs across the organisation.
Leadership Perspective on Future Challenges
Lutz Schuler, Chief Executive of Virgin Media O2, acknowledged the difficult road ahead while expressing confidence in the company's long-term strategy. "While we expect challenging market conditions to continue in 2026," Schuler stated, "we are well positioned to seize the right opportunities in each of our business areas – consumer, business-to-business and wholesale – and the foundations we’re putting in place today will help to build long-term customer trust and fuel future profitability and cash generation."
The merger with Daisy Group, which consolidated their business communications and IT operations into a new entity named O2 Daisy, creates a combined venture with annual sales of approximately £1.4 billion. This move is part of the broader effort to stabilise the business amidst the current market turbulence.
