Virgin Media Ponders Opening Up UK Network to Rival ISPs

Liberty Global, the owner of UK cable operator Virgin Media and one that has traditionally shunned the idea of providing true wholesale access to their ultrafast broadband network (a mix of hybrid fibre coax and full fibre FTTP), is now alleged by one newspaper’s sources to be reviewing the idea again.

In the past Virgin Media has been Openreach’s only real infrastructure competition in the market for faster broadband services and thus had little reason to go open access. So far their network has been built entirely via private investment in urban areas and is not yet deemed by Ofcom to have Significant Market Power (SMP), which means they don’t face the same regulation as Openreach (BT).

However, over the past couple of years this has begun to change and today various Gigabit capable Fibre-to-the-Premises (FTTP) providers are planning major deployments within the same markets (e.g. Cityfibre, Hyperoptic). See our Summary of UK Full Fibre Plans for more examples and details. All of this creates a new challenge to Virgin’s network and that’s on top of Openreach’s own FTTP plans.

According to The Telegraph, Liberty Global is now conducting a review that will consider, among other things, whether one way to counter this is to rent out access to ISPs like Sky Broadband. Officially the operator will not comment on the report and a spokesperson merely said, “We have the best broadband network in the UK and everyone knows it.”

The report comes shortly after Sky Broadband penned a letter to the bosses of several alternative “full fibre” ISPs, seemingly in the hope of opening talks that could result in new wholesale or other agreements to help “increase investment” and “bring ultrafast broadband to more homes” (here).

At this point we’d be surprised if Virgin Media did a u-turn on their previous approach, although equally there’s no doubt that the market as we know it is going through a gradual but significant change. As such it makes perfect sense for Virgin’s parent to be considering different approaches and as yet no decisions have been made.

One report from earlier this year also indicated that Virgin Media might have an interest in acquiring KCOM’s FTTP network in Hull, which would arguably become easier if they were able to reflect some of Ofcom’s existing wholesale regulations in that market (here). As usual, take all this with a pinch of salt until something official is announced.