ISPreview - VirginMedia Interview
VirginMedia Interview
By: Mark Jackson - Oct 23rd 2007 : Page 1 -of- 3
"It's not over yet, but we're at the beginning of the end for dial-up migration."

VirginMedia (VM), the UK’s largest cable operator, has had a rough year since completing a crucial re-brand and merger of three businesses (Virgin Mobile, ntl and Telewest). Its conflict with BSkyB over TV channels caused thousands of customers to jump ship and more recently there has been speculation surrounding the group’s potential sale via private equity, although unstable markets have since put that idea to bed for awhile.

Regardless, VM remains one of the largest operators in the UK with around 10 million customers, roughly 3.5m of which come from its broadband Internet access services; that makes any movement by VM incredibly important for the wider market to observe.

This week saw VM’s acting CEO, Neil Berkett, announce his intention to “refocus” the operators “energies onto [ITS] broadband platform”, a move that could prove pivotal. Naturally ISPreview took the opportunity to interview the group’s head of Product Management & Development for communication services, Paul Elworthy, about the future and opinions on market developments.

1. The increasingly saturated broadband market has become a problem for many ISP’s, slowing the influx of new customers from dialup migration and fresh sources. The result has seen most movement emanating from migrations between existing broadband providers. In your opinion, what does this mean for ISP’s?

It's not over yet, but we're at the beginning of the end for dial-up migration. So ISPs need to offer consumers genuinely compelling reasons to switch from other providers.

Not only that, but it's vital to keep existing customers happy, by providing a quality service and added-value features like comprehensive online security, premium content and the ability to easily upgrade speeds as usage develops.

Ensuring newcomers to broadband have some examples of what they can do with it is also important and our portal, which provides tonnes of content and services for customers, is the ninth most visited website in Britain so far this year.

2. Several major ISP’s have expressed concern about the BBC’s new free Video-on-Demand (VoD) iPlayer Internet TV (IPTV) service, primarily pointing towards its P2P based impact upon their networks.

Tiscali even went so far as to suggest that content providers should contribute to Internet providers, thus helping them to manage the impact. Others ISP’s fear that prices may have to rise, what are your thoughts on the subject?

The huge growth in online video entertainment, such as the iPlayer and our new football highlights service, is a challenge for all ISPs. But Virgin Media is particularly well equipped to manage the resulting appetite for more bandwidth. In the case of the BBC's iPlayer application, we're excited to be the first digital TV provider to host the service, which we're preparing to launch later in the year.

The partnership means our customers will have access to the service via their TV as well as over broadband. Because the iPlayer will be available through our existing TV on demand service, we expect our customers to enjoy the bulk of their iPlayer viewing on their TV, rather than on a smaller PC or laptop screen. Our customers already have access to a significant slice of the BBC's weekly output through the TV on demand service, plus access programmes from Channel 4, Buena Vista, HBO and other major content partners.  

We're in a unique position to offer this choice because, although we offer broadband connections of up to 20Mb, we have a separate digital TV platform with additional bandwidth for the TV services we provide. We already host Britain's biggest library of TV on demand entertainment, including high definition programmes and films which require a connection of around 18Mbp/s to stream live to our V+ box. Obviously that kind of bandwidth isn't widely available over copper wire and new services like BT Vision and Tiscali TV rely on the household's existing broadband connection.  

For those cable customers who are using video services over broadband, our traffic management policy ensures they don't have to contend with download caps which could cut off their connection or incur further charges. Instead we protect the quality of service for all users by temporarily reducing the speed of any connections which are being used very heavily and for prolonged periods at peak times. It typically affects less than ten per cent of our broadband customers and means they can still continue using video services if they wish.

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