Virgin Media, Liberty Global to Place $4.6B Broadband Bet
Taking more aggressive aim at incumbent telco BT, Virgin Media, the U.K.’s largest cable operator, said it will shell out £3 billion (US$4.6 billion) in the coming years on a plan to expand the reach of its broadband network to millions of additional homes and small businesses.
The initiative, called “Project Lightening,” calls for Virgin Media to extend its broadband network to an additional 4 million premises over the next five years, a move that will extend that total to nearly 17 million premises and, in the MSO’s estimate, create the foundation for 6,000 new jobs and 1,000 new apprenticeships. Virgin Media has set up a web site where consumers and small businesses can register to stay apprised of the MSO’s expansion plans.
Virgin Media believes that Project Lightning will pump £8 billion (US$12.3 billion) of value into the U.K. economy, citing an analysis by Oxera, an economic consultancy. Virgin Media, which is working on the initiative in tandem with parent company Liberty Global, is billing the project as the “single largest investment in broadband digital infrastructure in the country for more than a decade.
Virgin Media’s current, fastest residential DOCSIS 3.0 broadband tier tops out at 152 Mbps downstream. The number of virgin Media subs taking speeds of 100 Mbps or higher grew by a million during 2014, to 1.3 million, and now represents 28% of Virgin Media’s broadband sub base.
BT’s top tier, meanwhile, offers maximum downstream bursts of about 76 Mbps. The telco downplayed the increased threat by Virgin Media, telling Light Reading that its network already covers 22 million premises, and that the MSO’s expansion plan “doesn’t seem to cover rural areas or huge swathes of the UK.”
But Virgin Media and its parent company are already thinking ahead. In the announcement about Project Lightening, Liberty Global noted that it is preparing to trial DOCSIS 3.1, a next-gen access platform designed to handle multi-gigabit speeds, “across Europe later this year.” With Virgin Media’s systems factored in, Liberty Global serve a combined footprint of 27 million homes across 14 countries.
Liberty Global is pushing in that direction amid pressure from fiber-to-the-home competition as well as a batch of telcos, including BT, that are placing bets on G.fast, an emerging platform that will bring 1-Gig capabilities to DSL networks.
“Millions of homes and businesses will soon be able to benefit for the first time from broadband speeds at least twice as fast as those available from the other major providers,” Virgin Media CEO Tom Mockingridge said, in a statement. “Consumers and business owners who want to make the switch to better broadband speeds now have an alternative; you can call on Virgin Media to ‘Cable My Street’.”
The project also garnered a call-out from U.K. Prime Minister David Cameron: “I welcome this substantial investment from Virgin Media which is a vote of confidence in our long-term economic plan to support business and create jobs by building a superfast nation backed by world-class infrastructure. These 6,000 new jobs and apprenticeships will mean financial security and economic peace of mind for thousands more hardworking families across the country,” he said.
Virgin Media ended 2014 with 12.62 million homes passed, 3.76 million TV subs, 4.53 million Internet customers, and 4.21 million phone customers.
On the video front, Virgin Media said it added 585,000 TiVo subs in 2014, including 143,000 in the fourth quarter. By the end of 2014, 68% of Virgin Media’s TV subs, or 2.5 million of them, were on the TiVo platform
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