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Virgin to focus on Broadband?

# 22 October 2007, 18:30 by stuart

Virgin’s new CEO has been talking about their future direction.

The acting CEO of Virgin Media, Neil Berkett has announced that VM intend to focus on Broadband.

He told the Guardian: “Despite our technical advantage we are still not really standing out from the crowd. I really do want to refocus our energies onto the broadband platform.”

To a large extent, he is right. While the Cable network needs a lot of investment to ugrade it to cope with higher speeds, it can, theoretically, cope with speeds higher than the current 24 meg limit of DSL, and can (again theoretically) cope with speeds higher than the 50 meg Virgin Media are currently trialling.

Virgin’s main advantage is the fact that for the bulk of the jouney between the UBRs and customers, the network is fibreopticm only switching to copper cable at the customer’s street. BT have fibre to the exchange, but there can be several miles of cable between the exchange and the customer’s socket.

DSL signals also degrade over distance, a limitation which Cable does not suffer.

Virgin are going to have to spend an awful lot of money on network upgrades to enable them to provide reliable connections at higher speeds, and while BT is going to have to spend a lot more to provide fibre to the home (something they have mentioned looking at doing), BT may find it easier to get the money.

That’s not to say they are ignoring DTV. They aren’t. Freeview has persudaded a lot of people to try Digital TV. Virgin are planning to try and persuade those who want a wider selection of channels, and are happy to pay a little for pay TV, but don’t necessarily want Sky Sports. Exactly the same crowd Sky are targetting with their “Picnic” product.

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