The Q3 2023 results from Virgin Media O2 are out and with 16,700,700 serviceable homes passed the combined might of the Project Lightning roll-outs and now the nexfibre joint venture has seen the footprint grow by 723,000 premises in the last 12 months. That footprint growth also means broadband customer numbers have increased from 5,631,100 to 5,708,100 in the last 12 months.
What will surprise many given the complaints about price rises and the RPI + 3.9 formula baked into contracts is that the ARPU in Q3 2023 is lower than in Q2 2022 at £47.28 versus £48.19 a year ago. We suspect that this down to customers reviewing the bundle of products they pay for and dropping some elements, and especially if you have a reliable broadband connection you will prefer over the top TV subscriptions that can be stopped and started on a monthly basis rather than entering into large cable TV bundles.
The nexfibre joint venture is responsible now for pretty much all the expansion each quarter, and if our maths is correct the nexfibre joint venture has a footprint of 558,100 premises passed with 250,800 of these added in July, August and September 2023. If that pace continues by December 2023 the footprint could be over 800,000 premises passed meaning nexfibre as a wholesale venture is on the way to being the 3rd largest full-fibre network in the UK in 2024. For now nexfibre is only sold by Virgin Media O2 and is meant to be available as a wholesale product, and adding another retailer will be key to making the most of the investment. One issue for many potential customers is the nexfibre network while XGS-PON looks just like the Virgin Media O2 broadband offerings of the past, which thus carries a lot of negative baggage.
nexfibre has not integrated the Upp footprint which is said to be around 175,000 premises passed with XGS-PON in the East of England and these premises do not feature in the nexfibre figures yet. It will be interesting to see how many premises are added eventually, we suspect that perhaps a third or more are planned or partially built, but without access to ducting its impossible to verify and it is possible that Upp may still be commissioning some areas even though they don't seem to be taking any new orders at this time.
The last few days have seen the news of the sale of a minority stake in the mobile tower joint venture Cornerstone. The 16.67% stake sold means Virgin Media O2 will receive £360 million in cash and the expectation we have is that this will go towards helping fund the nexfibre roll-out.
In terms of what we have recorded in our database the total Virgin Media footprint we have on record is 16,436,327 premises passed, of which 1,500,971 premises are RFOG FTTP and 144,619 are nexfibre footprint. We are rapidly catching up on the nexfibre footprint, since on 1st October we had mapped just 41,388 premises passed, the challenge is to not fall behind on tracking the other full-fibre networks. To date the nexfibre roll-out has not had a major impact on the UK Gigabit or full-fibre figures since 90,708 out of the 144,619 premises we've mapped so far have another FTTP network available too and 39,503 have two other FTTP networks available.