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Liberty Global’s (Virgin Media) Broadband Delivers £1.4bn Boost to UK

Tuesday, May 30th, 2017 (2:32 pm) - Score 1,510
Virgin Media 2014 UK Logo

Cable operator Liberty Global, which owns Virgin Media, has claimed that the “economic effects” of their investments in the UK (i.e. higher broadband speeds, improved productivity and price competition) between 2013 and 2017 have delivered a “total social benefit” worth £1.38bn.

The analysis flows from a new Oxera Consulting report, which has been studying the economic impact of Liberty Global’s investment in new broadband infrastructure. Overall the operator claims to have invested £11.6bn (total capital expenditure – adjusted for inflation) across all of its European operations in new and existing infrastructure, customer premises equipment, business support and other key services.

Mike Fries, Liberty Global CEO, said:

“Our significant investment clearly has a positive impact for consumers and businesses across Europe, and we are proud that it simultaneously generates billions for the economy, while creating clear social benefits through improved speed, productivity and competition.”

One of those key investments has of course been the operator’s £3bn Project Lightning network expansion, which aims to cover a total of 17 million UK premises by 2019 (i.e. 4 million extra [2 million via FTTP]) – boosting their coverage of the United Kingdom to around 60-65%. Mind you there have recently been a few stumbling blocks with the roll-out progress (here), albeit not enough to upset Oxera’s study.

Otherwise the report estimates that the economic benefits to society across Europe total more than €7 billion since the start of 2013, including €5 billion in speed benefits to customers through access to a greater range and quality of internet services, plus €1.5 billion in productivity benefits through increased output of small businesses and home workers due to better connectivity, and finally €536 million in price benefits and competition.

Liberty Global claims that their investments often introduce network competition to an area for the first time, which is certainly true for a lot of UK homes where otherwise Openreach [BT] might be the sole supplier. However Openreach’s network is open access and Local Loop Unbundling (LLU) does somewhat complicate this argument. Suffice to say that gauging the economic benefit of faster broadband remains a ferociously difficult task and such figures are often open to interpretation.

Aside from Project Lighting we also expect Liberty Global to begin the roll-out of Gigabit capable DOCSIS 3.1 technology towards the end of 2017 (here) and a lot of the necessary infrastructure is already being installed in order to support that.

virgin media uk economic boost

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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10 Responses
  1. Avatar FastInternetPlz

    It only benefits the people who have it and if their service works, I don’t have VM and it’s just down the road been waiting for over 4 years for it to happen here but I lost hope because I feel like they cannot be bothered to give it us.

    • Avatar CarlT

      They’ll deliver where they want to, when they want to. Nothing to do with being bothered or not, they merely think they will make more money building elsewhere for now.

      It’s their money, they decide where they want to go and in what order. Your 2.1k You Tube subscribers sadly don’t feature in their decision making any more than my desire to take their top small business package does.

    • Avatar GNewton

      You will find that a lot of areas don’t have VM coverage, the VM network is a purely commercial rollout. Still, for those areas that do have coverage it is not unreasonable to assume that it could result in some economic benefits. However, as Mark Jackson’s article points out, the economic benefit of faster broadband are hard to quantify or to measure. The same is true for the various BDUK projects, or for other commercial superfast broadband projects from BT.

  2. Avatar GNewton

    In this context I was just wondering: A few years ago, back in 2015, when the Public Accounts Committee met with BDUK and BT, it was mentioned that BDUK had estimated the return on investment from the £1.7b of tax payer money to be 20 to 1. Have there ever been serious studies on this since then? It seems to me VMs estimate of having delivered a £1.4bn boost to the UK is a but more realistic figure.

  3. Avatar Mike

    “Aside from Project Lighting we also expect Liberty Global to begin the roll-out of Gigabit capable DOCSIS 3.1 technology towards the end of 2017 (here) and a lot of the necessary infrastructure is already being installed in order to support that.”

    Gigabit? I’d be happy if my “200Mb” connection could deliver that speed at any time of the day when I’m not asleep, rather than the paltry 2 to 10Mbps I get at peak times.

    • Avatar CarlT

      There are some desperately underperforming areas with no easy, quick or cheap fixes 🙁

    • Avatar Chris P

      Wow CarlT, finally admission that VM isn’t all singing all dancing always.

      On another article mvno’s are achieving better satisfaction rates than the networks they are carried on.
      It’s time VM was made to wholesale its access network and allow others on board.

      It’s the quickest way to get fibre out there for the masses.

    • Avatar CarlT

      Wholesale access would make no difference to most of the issues and would break the case for future investment in network expansion.

      I’m not sure how it would expedite fibre deployment any faster than access to BT’s network at a wholesale and physical level has.

    • Avatar Ultraspeedy

      “…if my “200Mb” connection could deliver that speed at any time of the day when I’m not asleep, rather than the paltry 2 to 10Mbps I get at peak times.”

      I guess the questions here are…

      If congestion is as bad as you claim, then why are you paying extra for a 200Mb package??

      How long have you been with them and are you in contract still?

      Why not swap to a 30 day contract, the prices for broadband ONLY are now exactly the same as 12 month broadband only prices. If that then does not suit you can leave after just 30 days.

      Can not understand why anyone would still waste their time here regularly moaning about their VM broadband when effectively you can have 30 day contracts and still do not leave.

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