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Liberty Global Completes GBP15bn Takeover of UK Cable ISP Virgin Media

Saturday, June 8th, 2013 (7:49 am) - Score 2,438
virgin media uk

International cable operator Liberty Global (LGi) has, after clearing all the necessary shareholder and regulatory approvals, officially completed its £15bn (enterprise value) acquisition of broadband, phone and TV giant Virgin Media in the United Kingdom.

The move (first announced in Feb 2013) means that Virgin Media, which will retain its current brand, now becomes part of Liberty Global’s wider operations. The newly combined group has created one the world’s biggest triple-play broadband providers, serving a total of 25 million customers (47 million homes) across 14 countries through brands like UPC, Unitymedia, Kabel BW, Telenet and VTR.

Meanwhile Virgin Media’s former CEO, Neil Berkett, has left the company with the equivalent of £58 million in his pocket (mostly his own shares) and signed the reigns over to his New Zealand born replacement Tom Mockridge. The new boss was a former CEO of Sky Italia and use to head up Rupert Murdoch’s UK newspapers before he resigned. LGi’s boss, John Malone, and Murdoch have a long running rivalry.

Tom Mockridge, CEO of Virgin Media, said:

Virgin Media has become one of the UK’s most powerful media brands thanks to both the loyalty of its customers and the energy of its employees. I am fortunate to be joining the company at this important inflection point in its development, and look forward to working closely with Mike and the broader Liberty Global team to deliver cutting-edge products and services that excite and inspire our customers.”

Mike Fries, President and CEO of Liberty Global, said:

This is a great day for customers, employees and shareholders of both Liberty Global and Virgin Media. With superior network capacity, the fastest broadband speeds and innovative digital TV platforms, we’ve never been more excited about the growth potential and strategic direction of our business.

Virgin Media will continue to thrive under the leadership of Tom Mockridge who starts as CEO today, with the support of a fantastic management team which includes both Liberty Global and Virgin Media executives.”

It’s unclear precisely what the future will now hold for Virgin Media’s network, although LGi has previously pointed to the “significant potential to monetize [Virgin Media’s] customer base” and most recently hinted at plans to launch a new range of products and services. Virgin Media are often regarded as a “premium” service so it will be interesting to see where they find the potential to monetize.

Some have speculated that Virgin Media might even begin to expand the reach of its cable platform, which currently covers around half of the country (population). Certainly there are many areas where this would be viable but at the same time Virgin wouldn’t want to attract any new regulation from Ofcom (e.g. forcing them to offer open wholesale access to rival ISPs) and is thus likely to keep any such plans, if they even exist (no sign of this yet), to only a limited scale.

Leave a Comment
28 Responses
  1. Avatar sam

    Maybe we’ll get our double upload speed now, maybe we’ll get a superhub 2 to replace our faulty wireless in the superhub 1. Who am i kidding, we won’t get any of those!

    Roll on BT upgrading my exchange to fibre so i can get some usable speed via FTTC, i’m in for a LONG wait though.

    • Avatar Theo

      To be honest with you, I wouldn’t be so excited. We got the SuperHub 2 on our install day – the first day it was made available to customers – and we’ve had nothing but hassle. 144MBPS/300MBPS wireless N is quite faulty and not supported by most otherwise n-supporting devices (essentially, devices connect and are assigned IPs via DHCP but can’t connect to the internet, a fault VM have done nothing about), regular connection drops are to be expected and to top it all off you still can’t change basic settings like DNS servers at router level. Essentially, we’ve got a very expensive (although rather attractive) cable modem as I’ve just plugged an Apple Airport into it to avoid further problems. I suggest you do the same, as I’m yet to see anything positive with the SuperHub 2.

  2. Avatar Bob

    To really grow the business they need to extend their coverage. The scope to get more value out of the existing subscribers is very limited as that’s the approach NTL & VM have used for decades

    If they can get access to the BT ducting they could build out from existing coverage areas at a modest cost

    • Avatar FibreFred

      Agreed, they are facing stiffer competition these days that they can still fight of course but they do need to expand their footprint but probably won’t for fear of becoming a SMP

  3. Avatar sheffieldowl

    Will you come and lay some cables on my street now please.

  4. Avatar FibreFred

    “Superior network capacity” bless , he’s probably not got around to seeing all the congestion posts on the virgin forums

    • Avatar MikeW

      LOL – I thought precisely that on reading the quote.

      Ironic after last week’s discussion, really. They might have the highest speeds on hybrid copper-fibre access, but they certainly don’t have the highest network capacity!

    • Avatar DanielM

      The network itself is great. it’s just the local CMTS where the issue is

      There network traffic levels are over 1Tbps

    • Avatar FibreFred

      Not sure about that DanielM what about the oversubscribed UBR’s in areas?

    • Avatar DanielM

      Did you not read what i said?

      “what about the oversubscribed UBR’s in areas?”

      As i said,.. it’s just the local CMTS where the issue is

    • Avatar MikeW

      @DanielM

      My comment was more about the capacity of the access network – the average capacity (per home) that the copper coax can carry.

    • Avatar FibreFred

      Sorry yes I thought you were referring to local street congestion, its all part of the network and network capacity, its a pinch point. Having lots of bandwidth in the core won’t help people on oversubscribed routers

    • Avatar Bob

      VM though regularly come out top in surveys way above BT. I have no doubt that they have congestion in some areas but they do fix it but not as fast as some would like but I would guess that will always be the case. BT suffers far worse from congestion issues than VM

    • Avatar FibreFred

      I don’t see any mention of BT in this news article, its about Virgin Media and I was commenting on a particular comment of theirs. Please try to take “on topic”

    • Avatar FibreFred

      “BT suffers far worse from congestion issues than VM”

      Again off topic, but for the record please check Ofcom reports to counter what you’ve said

    • My monitoring and experience is that Virgin Media have _much_ more congestion than BT. However it is also much more granular. When BT have issues it affects huge chunks of the UK.. when Virgin Media have congestion it takes longer to get fixed but only affects a road or two.

    • Avatar keith

      Agreed 110% Tom Virgin congestion is normally very localised, BT congestion often affects huge chunks of the country particularly the South East and South West most recently.
      Glad we were all able to clear up the congestion debate 🙂

    • The point I was trying to make but didn’t really convey is that I’d rather be on BT than Virgin Media. BT seems to be less chance of congestion and fixed quicker if it occurs.

    • Avatar FibreFred

      You conveyed it fine, he just didn’t like what you said so he twisted it

    • Avatar keith

      No i understand him fine…

      “When BT have issues it affects huge chunks of the UK”

      “When Virgin Media have congestion it takes longer to get fixed but only affects a road or two.”

      Or the long and short of it WHEN BT suffer congestion it is in wider areas compared to the odd street of Virgin.

      He would sooner have BT as any congestion issue is fixed/goes away quicker. Which i would also agree with. As to WHEN congestion does occur though i agree again with him it often affects a far larger area on BT.

      In fact just like him we know both products suffer congestion, unlike you that wants to continually portray it is only Virgin. That is the difference as always, you and your stupidity.

  5. Avatar DanielM

    another thing. would this mean they are now bound to the DMCA laws? Since it’s affectively owned by a US company now/

    • Avatar Kyle

      I’d assume not given that the operations are run in a different territory… same with any data compliance laws.

    • Avatar Dan

      Virgin Media was a US company, its corporate headquarters were in New York. As part of its acquisition of Virgin Media, Liberty Global Inc. will redomicile to the United Kingdom by becoming a subsidiary of a new holding company, a UK plc.

  6. Avatar Bilbo

    Why do people always complain about the size of VM’s footprint!? Yes it would be great if they expanded but does anyone realise the costs involved? No – VM simply can’t afford that level of expansion and any who thinks using BT’s access network I.e ducting is a pracitcal solution has no idea how cable networks are designed!

    • Avatar FibreFred

      They might be able to afford it under their new owners?

      But like I said major expansion would seem them classed as an SMP which I doubt they’d welcome

  7. Avatar Bob

    There would be no problem with using the BT ducting to help build out the VM network. It is expensive but not that expensive as VM does not have the legacy copper networks that BT have. The key to it is take up and that’s now getting up to the levels where the economic of it work. Liberty has very deep pockets as well . It may not be know in the UK but it is one of the biggest players in the market

    • Avatar Bilbo

      ‘There would be no problem with using the BT ducting to help build out the VM network.’ Comments like this I find amusing. I’d like to refer you to my early comment on the practicality of using BT ducting. I’m not saying its impossible but it would be just as expensive as VM laying there own, especially with the unfeasible costs of BT’s PIA product.

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