Virgin Media UK to Launch 500Mbps Broadband in Spring 2019

Cable ISP Virgin Media UK (Liberty Global) has published their latest results to the end of 2018 (calendar Q4), which saw their network extend to cover another 144,000 premises and their broadband base grow to total 5,224,600 (up by 21.7K in the quarter vs 36.4K in Q3). But they’re also boosting top speeds from 350Mbps to 500Mbps!

Since the last set of results Virgin Media has had to contend with some naughty contractors in Wrexham (here) and they’ve teamed-up with a graphic design firm (Shutter Media) to test out some new camouflage wraps for their street cabinets (here). On top of that we also recently reported on the possibility that their Virgin Media Business division could be about to launch a new 500Mbps broadband tier (here).

The big news today is that they’ve confirmed their plan to launch a 500Mbps (35Mbps upload) service this spring, although the results don’t clarify whether this will be coming to the residential or business side of their network first (we’re checking). The new tier, so far as we’re aware, will continue to use their existing EuroDOCSIS 3 network and not the forthcoming DOCSIS 3.1 upgrade (3.1 also requires a new router).

Elsewhere we note that the pace of their £3bn Project Lightning network expansion appears to have dramatically increased during the final three months of 2018. Virgin’s FTTP and Hybrid Fibre Coax (HFC) based EuroDOCSIS cable broadband and TV network has now reached an additional 1.6 million UK premises since it began in 2015/16.

The original aim of this roll-out was to cover 4 million extra premises (17 million total or c.60%+ of the UK) by the end of 2020 (later revised to 2019 before it was discovered that they’d overstated progress), but c.3 million now seems to be a safer bet (here). However it remains to be seen whether they continue the roll-out beyond that completion date.

Quarterly (Calendar) Project Lightning Rollout
Q4 2018 = 144,000 Premises
Q3 2018 = 109,000 Premises
Q2 2018 = 118,000 Premises
Q1 2018 = 111,000 Premises (likely impacted by heavy snow)
Q4 2017 = 159,000 Premises
Q3 2017 = 147,000 Premises
Q2 2017 = 127,000 Premises
Q1 2017 = 102,000 Premises

On particularly interesting thing to note is that out of the c.481,000 premises they covered during 2018, some 60% of those were done using Fibre-to-the-Premises (FTTP) technology. This represents the first time that Virgin Media has given us any clear indication of the live FTTP vs HFC deployment split under Project Lightning (the original plan was to do 2 million via HFC and 2 million via FTTP).

Mike Fries, CEO of Liberty Global, said:

“The past fourteen months have been transformational for Liberty Global. After two decades of buying, building and growing world-class cable operations in Europe, we have announced or completed transactions in six of our twelve markets at premium valuations. Together these deals represent an aggregate enterprise value of $31 billion and net cash proceeds to the company, when completed, of $16 billion6. It has long been our ambition to create or enable national champions, and we couldn’t be more proud of these fixed-mobile combinations, which will challenge incumbents, accelerate innovation and benefit customers for years to come.

After these transactions, in addition to a significant cash balance, a $2 billion strategic investment portfolio and over $2 billion in net tax assets, we will continue to be the largest cable operator in the U.K., Ireland, Belgium, Poland and Slovakia.

Together our operations serve 23 million RGUs and generate $11 billion of annual revenue. We also serve another 10 million RGUs and generate over $4 billion of annual revenue in The Netherlands through our 50/50 JV with Vodafone. Each of these businesses is entering a new period of reduced capital intensity and meaningful operating free cash flow (“OFCF”) growth. Also, in connection with the changing scope of our business, we initiated a broader reorganization plan in January, which will result in a leaner operating structure. As we move through the year, we will have further updates on this initiative.”

Meanwhile the operator also confirmed that they had a total Mobile (EE MVNO) customer base of 3,039,500 (up from 3,031,200 in the last quarter) and 78% of their broadband base is now on an ultrafast (100Mbps+) capable package (up from 77%).

We should also add that they have 4,571,200 telephone customers in the UK (up from 4,540,700) and 3,872,000 video / TV users (down from 3,901,400). On top of that 72% of their broadband base is using the Hub 3.0 (SuperHub v3) router (up from 68%) and 57% of their video/TV base uses their V6 set-top-box. We also note that Voice-over-IP (VoIP) services are now available to 42% of their UK cable footprint.

We will update this article again once Virgin Media has provided some additional information about their new 500Mbps service. Mind you we really think they need to launch a better router (likely to be a variant of Liberty Global’s Gigabit Connect Box device) in order to make the most of such a plan, since the Hub 3.0 just isn’t up to the task; not least due to its WiFi performance.

At this stage we believe that the new 500Mbps plan is likely to be launched as a speed boost to their existing 350Mbps package, but we have not yet had this confirmed.

UPDATE 7:17am

After speaking to Virgin Media we can confirm that the upload speed will indeed be 35Mbps and by Spring they mean the April/May 2019 window. We did ask some additional questions about whether it would be made available to business and residential customers at the same time, as well as how the upgrade would be implemented and if other packages would benefit from a speed boost, but no further details will be revealed until launch.

NOTE: The downstream config rate for the new 500Mbps speed appears to be over-provisioned (Virgin always does this) at 575,000,000 (575Mbps), while for upstream it’s a similar story on 38,520,000 (38.5Mbps). Hence why their average advertised speeds often go above the stated plan speed, capacity allowing.

UPDATE 11:20am

Virgin has also hinted in a surprisingly low-key way about their plan to launch two “gigabit cities” this year, which is likely to reflect Liberty Global’s DOCSIS 3.1 upgrade (here). We’ve done a separate story for this as it’s quite a big development for a mere update.