Virgin Media to open up broadband network to wholesalers

[browney]

Thinkbroadband.com

Virgin are looking at opening up their broadband network to other providers in a move that could place them as a competitor to BT in the wholesale market. This would allow other service providers to sell the underlying Virgin products such as their 50Mbps broadband along with services such as telephone lines and television products.

Although the move has been mooted in industry circles for a while, the news in the Guardian yesterday indicates that Virgin may have this up and running within 18 months. One possible reason for the move is perhaps to preempt Ofcom forcing unbundling, similar to how BT were forced to open up their exchanges to competitors several years ago.

Whilst Virgin do not have nationwide coverage that BT do (Virgin cover around 57% of homes), they do have a valuable fibre/coax based network which can help drive take up of faster broadband services. BT's competitive fibre to the cabinet (FTTC) service is expected to cover around 40% of homes by 2012, but will probably only offer speeds up to 40Mbps. In contrast, Virgin already offer 50Mbps now and are able to upgrade this to 100Mbps when there is demand. This puts Virgin a large step ahead of BT and will definitely help them draw in other ISPs who will want to be offering the fastest service possible to help keep their customers onboard.

This is not to say that BT will be displaced from their role in providing the majority of broadband connections. Virgin don't have plans to build out their network to a larger area, so the 57% coverage is unlikely to change. What may happen is that this could drive down wholesale prices of broadband as BT try to ensure that service providers stay with their wholesale service. It could also induce a larger disparity in prices between the areas that have Virgin services available and those that don't, as with BT not having competition in some areas, prices could remain stagnant.

Would not be surprised if this was an idea at the moment rather then a fact,vm have to stm their own broadband customers at present,ie me and thousands of others what would happen if they were to flog access to everyone on a wholesale basis.

And i do not think the regulator would make them open up the cable network as the network was financed entirely out of private capital,unlike bts which had millions of taxpayers £sssss, pumped in under its guise as a former nationalised giant. I would say its vm at best fishing around in desperation (hope not), at ways of paying off its huge deficit,if it does go ahead (hope not) lets hope its cable base customers do not suffer (unlikely) as it sounds like bad news.

[haydnwalker]

I think this is a good thing - though they need to iron out the bugs in any current processes (ie - who comes if you need an engineer? is it VM or is it your ISP?) It may mean a better deal for consumers, and it may help VM extend their cable network if they get enough ISPs signed up for their wholesale products (though I don't think I'll be holding my breath).

[Ignitionnet]

Originally Posted by richard1960

Would not be surprised if this was an idea at the moment rather then a fact,vm have to stm their own broadband customers at present,ie me and thousands of others what would happen if they were to flog access to everyone on a wholesale basis.

Depends how much the wholesale customers pay

And i do not think the regulator would make them open up the cable network as the network was financed entirely out of private capital,unlike bts which had millions of taxpayers £sssss, pumped in under its guise as a former nationalised giant. I would say its vm at best fishing around in desperation (hope not), at ways of paying off its huge deficit,if it does go ahead (hope not) lets hope its cable base customers do not suffer (unlikely) as it sounds like bad news.

You think wrong I'm afraid. It's not about where the money comes from it's about the competitive landscape. Worth remembering it's not just Ofcom that are the issue but the Euro regulators as well.

http://www.theregister.co.uk/2009/05...dia_wholesale/

The obligatory semi-denial

[browney]

Update - 15:25
Virgin have confirmed this afternoon that they have no "secret plans", as alluded by the Guardian, and in fact no plans at all to unbundle their broadband network, making it available on a wholesale basis, as they plan to keep focus on their current high speed broadband offerings.

Originally Posted by Broadbandings

Depends how much the wholesale customers pay



You think wrong I'm afraid. It's not about where the money comes from it's about the competitive landscape. Worth remembering it's not just Ofcom that are the issue but the Euro regulators as well.

http://www.theregister.co.uk/2009/05...dia_wholesale/

The obligatory semi-denial

Well we will just have to wait and see,will we not.

[BarFly]

Originally Posted by haydnwalker

I think this is a good thing - though they need to iron out the bugs in any current processes (ie - who comes if you need an engineer? is it VM or is it your ISP?) It may mean a better deal for consumers, and it may help VM extend their cable network if they get enough ISPs signed up for their wholesale products (though I don't think I'll be holding my breath).

When this was done previously, NTL supplied the engineer if a there was a fault with the cabling etc If the modem was faulty the previous ISP (AOL) ordered the replacement.

The Isp provided 1st line support, NTL provided 2nd line support to the ISP.

Cant see it happening soon, as only less than a year ago ( maybe 18months ) the last AOL customer either migrated to VM, or ceased there cable service.

[MovedGoalPosts]

Virgin Media's sole advantage over the many competitor ISPs is their cable technology. Where cable exist, VM should have the superior broadband capability, assuming they have been able to invest sufficiently to meet capacity.

On that basis why would they want to open their private invested infrastructure to the very competitors over which they have an edge?

The only reason would be a lack of further growth. If VM were to move towards being a network provider rather than an end user supplier, this might make sense. Could they make more money by simply providing the network for other carriers? It would be a foolish business that didn't keep things under review.

In the short term with the 50meg roll out and other upgrades like 2 to 10meg in progress, I suspect VM still have a lot of mileage in their own infrastructure.

However, from an economic point of view, if VM now has the fibre based networks in place, does it make sense for another supplier to come along and try and duplicate that?

Originally Posted by haydnwalker

I think this is a good thing - though they need to iron out the bugs in any current processes (ie - who comes if you need an engineer? is it VM or is it your ISP?) It may mean a better deal for consumers, and it may help VM extend their cable network if they get enough ISPs signed up for their wholesale products (though I don't think I'll be holding my breath).

Why would it be a good thing? At the moment vm stm their own customers without any wholesale going on, and they do seem to be bandwidth constrained,if vm do wholesale and the system becomes more congested, would vms very own customers be even more stmd sorry do not see how this could be good news at all.

Of course as broadbandings,pointed out above the eu may or may not force vm to open up its network however that remains to be seen, i do not believe at this moment in time they will do. The future however may be different vm is a wholly privately owned concern,will the eu try to run vms private buisiness by telling them to open up the jury is out on that one.

Vm is not the dominent market force in its sector as such, so either ofcom or the eu have no real reason to act.

[haydnwalker]

Well... have you ever thought that if VM open up their network, then they will be getting money from the ISPs who sign up (equals more revenue generated) and customers who want cable but don't like VMs customer care quality can use an ISP that does do customer care properly. Its not necessarily about market dominance, its about generating cash more cash generated = less debt and more chance to expand