Reported by The Guardian
The company has lost 182,000 broadband and 644,000 mobile customers in two years and is operating in an increasingly competitive market competition
M ike Fries may be totting up swingeing job cuts, a £22bn debt pile and the loss of hundreds of thousands of customers, but he appears to be putting a brave face on the situation. “In our minds, anyway, this is not a crisis,” the boss of the co-owner of Virgin Media O2 said this week.
The UK telecoms company, which offers broadband, TV, landline and mobile services, had just announced £800m in cost savings, including potentially cutting up to a quarter of staff. Fries, the chief executive of Liberty Global , faced searching questions on its future and a potential refinancing of its huge debt pile next year. “We made it clear, we have nothing to add to where we sit today,” he said.
More from the original report
However, for the company’s 16,000 UK staff, the job cuts, and a raft of other measures including abandoning investing in upgrading its cable network to full fibre, are symptomatic of a business if not in crisis, then under extreme pressure. And it has left industry watchers wondering: what has gone wrong at Virgin Media O2 ?
Five years ago, Virgin Media-owner Liberty Global and Telefónica, owner of mobile network O2, completed a £31bn mega-merger that paved the way for a new “national champion” to challenge BT. It represented the latest upheaval for a company defined by a deal to bring together cable firms NTL and Telewest with Sir Richard Branson’s Virgin Mobile for a 2007 rebrand .
The post-merger mission, however, has proved tougher than bullish management, led by Fries’s lieutenant, Lutz Schüler, perhaps expected.
In the last two years the company has lost 182,000 broadband and 644,000 mobile customers, although overall numbers still remain up since the merger, according to Enders Analysis.
VMO2 is operating in a market that has seen an explosion of competition including the emergence of about 100 so-called alt-nets laying fibre networks, and BT’s belated decision to “build like fury” to replace its ageing copper lines. This fight…