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Originally Posted by homesecurity
Having worked alongside cable and telecoms distribution plant for decades, the NetCo restructuring and the Mustang timeline make complete sense once you look at the physical RF reality of the legacy coaxial network:
**1. The 2Gbps HFC Reality: Heavy Downstream Bandwidth, Asymmetric Upstream Trap**
Virgin can push 2Gbps downstream over DOCSIS 3.1 today by bonding two 192MHz OFDM blocks alongside 24 to 32 legacy SC-QAM downstream carriers. The Hub 5 Broadcom BCM3390 chipset handles that downstream throughput with ease.
However, the crippling bottleneck on legacy HFC remains the **upstream return path**:
- The vast majority of UK HFC nodes are still running the legacy **Sub-Split (5 to 65 MHz)**.
- That tiny 60MHz slice of spectrum only accommodates four 6.4MHz ATDMA channels (plus one 50MHz OFDMA upstream block where enabled), capping real-world aggregate upstream bandwidth across an entire node segment.
- Delivering true symmetric multi-gigabit speeds on HFC would require retrofitting **Mid-Split (85 MHz)** or **High-Split (204 MHz)** diplex filters across every street cabinet, line extender, and distribution amplifier in the cascade—which costs nearly as much in physical labour as blowing micro-fibre down the existing ducts.
**2. The NetCo / Nexfibre Shift**
Liberty Global's comments about not putting further FTTP CAPEX directly on the VM02 balance sheet are driven by the corporate spin-off of the network into **NetCo**:
- By ring-fencing the physical network into a wholesale NetCo (mirroring the Openreach / BT Retail split), they can merge or co-build directly with **Nexfibre** (backed by InfraVia's £4.5B external financing) without burdening VM02's retail balance sheet with debt.
- Project Mustang isn't dead—it's being shifted to NetCo wholesale financing where it can compete for third-party wholesale ISP traffic (Sky, Vodafone, TalkTalk) against Openreach.
**3. OPEX Always Kills HFC in the End**
Regardless of how long they sweat the DOCSIS 3.1 assets, the operational cost of active coaxial plant is staggering compared to passive optical:
- HFC requires powered street nodes, line amplifiers, and power supply units continuously drawing unmetered mains electricity 24/7/365, all vulnerable to summer/winter temperature RF tilt and seasonal balancing.
- XGS-PON is completely passive between the Headend OLT and the home ONT. Zero street electricity, zero RF amplifiers to replace after lightning strikes or power surges, and an immediate 10Gbps symmetrical path. HFC will be sweated where cash flow demands it, but every operator knows full fibre is the only viable endgame.
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Much of what you posted technically about HFC RF spectrum is accurate, but the narrative on NetCo and cable CAPEX relies on an outdated structural premise.
1. The NetCo Reality
The standalone corporate NetCo proposal is dead. The actual timeline is:
- February 2024: NetCo proposed.
- July 2025: NetCo cancelled after Telefónica withdrew support.
- September 2025: Dedicated in-house Fixed Wholesale unit launched.
That internal Fixed Wholesale operation is very much alive today, acting as VMO2's wholesale vehicle for selling access across the Virgin Media and nexfibre footprints through a common commercial interface. It serves wholesale customers including ISPs and other network operators.
2. Project Mustang & CAPEX
Liberty Global's decision not to put further FTTP CAPEX directly on VMO2's balance sheet has nothing to do with NetCo or wholesale mechanics. It is simple financial arithmetic: VMO2 has £22.4bn of debt and lease obligations and cannot justify the massive upfront capital burden of Project Mustang while waiting years to realise the financial returns from migrating customers and services from HFC and RFoG to XGS-PON.
3. High-Split vs. R-PHY / DAA Economics
The cost comparison for HFC is actually potentially much worse than your post suggests. Delivering true symmetrical multi-gigabit DOCSIS isn't just an exercise in swapping street diplex filters. A serious DOCSIS 4.0 upgrade would involve extensive modification of the RF distribution plant and, in a modern DAA-based deployment, substantial investment in Remote PHY nodes, digital fibre transport, CCAP infrastructure and compatible active street equipment.
As recently as July 2020, Virgin Media had started deploying R-PHY in Coventry, with a much wider rollout planned. At that time, the strategy was to double down on the DOCSIS network. DOCSIS 4.0 would have been a logical subsequent development. However, VM subsequently pivoted towards full-fibre XGS-PON and Project Mustang, correctly in my view.
The point is that upgrading HFC to deliver symmetrical multi-gigabit speeds must involve substantial additional capital expenditure, while retaining the ongoing power consumption and active maintenance costs of the coaxial network. Depending on the condition of the existing plant and the extent of the upgrade, this could cost more than installing fibre through existing ducts.
With VMO2's current financial constraints and little commercial justification for symmetrical multi-gigabit HFC, I see no prospect of a comprehensive High-Split/DOCSIS 4.0 programme.
In any case, why would VM want symmetrical speeds on its legacy network? The recently-announced 2Gbps download and 100Mbps upload service is cheap to deliver as it requires no civil engineering and will be more than sufficient for the vast majority of customers, and it's reported that 2Gbps would be available on almost 70% of the HFC network next year.
4. The Mustang Pause
I agree Project Mustang isn't dead, but not for the reason you put forward. The holy grail for VMO2 is an all-IP, passive access platform, bringing substantial long-term benefits through lower electricity consumption, reduced maintenance and the eventual elimination of
all of the active HFC street infrastructure. (There are even bigger savings to be made also from headend consolidation, but that's a somewhat complicated subject requiring its own thread.)
Mustang's wider expansion has been halted because VMO2's balance sheet cannot support the required investment at present. It can continue using the fibre already built and migrating customers where commercially sensible. A broader programme could resume when its finances permit, even if that means waiting several years or, potentially, a decade.
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