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Virgin Media Moots New Alternative Full Fibre ISP for UK Rural Areas

Saturday, July 20th, 2019 (7:25 am) - Score 5,924
virgin_media_engineers_plan_map

Cable TV and broadband operator Virgin Media (Liberty Global) is reported to be examining the possibility of creating a new company in the UK, which could compete with Openreach (BT) in rural areas by building its own Gigabit capable Fibre-to-the-Premises (FTTP) network (open access for other ISPs to harness).

At present Virgin Media tends to only focus their 500Mbps+ cable network on the more lucrative urban areas, which has so far enabled them to cover over half of all premises across the United Kingdom. This could potentially reach around 60% of premises once their Project Lightning network expansion completes.

One other benefit of the above approach is that it has so far kept them out of Ofcom’s regulatory crosshairs, although this might change if they were to build significantly beyond their existing coverage plans. One way around that would be to setup a new company, via Liberty Global, and then position Virgin Media as the anchor tenant ISP on that network.

Funnily enough this is the sort of approach that “multiple people with direct knowledge of the plan” have told FT (paywall) is now being considered by Liberty Global. The operator is even said to have appointed investment bank LionTree to help establish the Joint Venture (JV) business.

The plan is currently said to be at an “early stage” and could be partially built by harnessing Openreach’s existing cable ducts via their Physical Infrastructure Access (PIA) product. The PIA solution, which allows rival ISPs to run their own fibre through Openreach’s ducts, has recently been revised to make it easier / cheaper to harness. Ofcom also plans to further improve its flexibility by removing the existing access / usage restrictions (here).

The suggestion is that the new company could potentially reach an additional 2 million UK premises, although it would need to attract a fair bit of private investment and potentially also public funding in order to achieve that. Luckily there seems to be no shortage of investors willing to throw large sums of money at alternative “full fibre” (FTTP) networks, even unproven ones, so it’s a fairly safe bet they’d be able to secure some support.

No doubt some of this may depend upon what the next UK Prime Minister, which now seems highly likely to be Boris Johnson, will do. Boris has already set the welcome, albeit seemingly impossible, target of achieving nationwide full fibre coverage by 2025 (here). Regardless of possibility, this would also require a significant funding boost of several billion pounds and Virgin / Liberty will no doubt be ready to bite.

At this point those with a long memory may note some glaring similarities between the above plan and what was proposed all the way back in 2011 (here). Back then Fujitsu UK, TalkTalk and Virgin Media jointly proposed to build an alternative open access FTTH network to 5 million “rural” homes as part of an early Joint Venture under the original Broadband Delivery UK programme.

The idea was ultimately abandoned in 2013 (here) after it became abundantly clear that nobody was going to award a contract to the unproven venture, particularly since it required a large amount of public investment to even get started and hadn’t yet built any independent rural networks of its own (Fujitsu proposed to invest up to £2bn of its own money). As above, today’s market today is significantly more favourable.

Finally, we note that the above plan talks a lot about “rural” coverage, but if they’re focusing upon the final 40% of areas (i.e. those not intended to be reached by Virgin Media) then there are still a lot of city suburbs, major towns and large villages to cater for first. We suspect the plan may not involve much in the way of truly remote rural areas (i.e. roughly the final 10% of premises).

UPDATE 29th July 2019

Apparently the aforementioned proposal is called Project Hermes, which is just the working title and not what any future company or ISP would be called. In ancient Greek, Hermes was known as the god of trade, heraldry, merchants, commerce, roads, thieves, trickery, sports, travellers and athletes.

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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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19 Responses
  1. Avatar Matthew

    Well Liberty Global suddenly do find themselves with a a lot of cash not all will have gone to shareholders from the Germany and Eastern Europe Sales. But will see if they are willing to invest it.

  2. Avatar MARBALINA BARBISONA ;DD

    Guys in the picture look so happy. I wonder if customers are the same.

  3. Avatar Duncan

    So I assume this includes all their services like TV/phone etc. Or is it just for internet?

    • Avatar Jack

      I guess if they offer TV it’ll be a IPTV service since it’ll work out cheaper than doing Docsis over fibre.

    • Avatar Matthew

      Err they could just use what VM are using in there other FTTP areas i imagine

    • Avatar CarlT

      Given it’ll be a wholesale service I can’t really imagine other operators selling Virgin branded TV. Kinda goes against the idea of an open-access wholesale network if your own retail arm gets special treatment and would be pointless on such a network to run RFoG.

    • Avatar Matthew

      Perhaps or they could do something like Sky are doing in italy with Sky Q over Fibre i suppose

    • Avatar CarlT

      They can just use IPTV. The main reasons they use RFoG and DoCSIS in the Lightning areas is to save a few quid on CPE alongside running off of existing hubs. A new open-access network would, necessarily, have a different architecture so anything other than IPTV is pointless.

      A fair amount of the TV channels in the cabled areas are IPTV and the rest will, eventually, go that way.

  4. Avatar StillinDialUpTImesHereGLORIOUSENGLAND

    tim duncan get TALKTALK GFAST 150mbps for £28 per month or 300mbps for £50 better option for you buddy.

    • Avatar Andy Mitchell

      I wouldn’t touch TalkTalk with a barge pole.
      When their service is ok then it’s ok but when there’s problems, their customer service is amongst the worst.
      Also, G.fast isn’t available in most areas and there’s no plans to push it any further as OpenReach is doubling down on FTTP instead.
      Frustrating for me as G.fast was due on my cabinet this year but got pulled. Now I’m stuck on 70/20 because Virgin won’t install into a block of flats.

    • Avatar Declan M

      I currently have talktalk fftc 38/10 cant order any higher speeds due to distance from cabinet switched from Sky and the service is top notch would never go back to sky.

    • Avatar Web Dude

      @ Andy Mitchell – while I am similarly unlikely to use TalkTalk in my lifetime, I saw “Now I’m stuck on 70/20” and wondered whether you are frustrated by the 70 Mbps or the 20 Mbps?

      Call me “nosy” but curious about how the extra speed you’d like would benefit you ?

      I was getting 25 Mbps down (from getting FTTC installed in February 2018) but over the summer something changed (still unclear as my ISP is making itself look clueless by not explaining the change) and speed increased to 40 Mbps downstream, which WOULD BE fine for most of my needs, except reliability dropped like a stone (it seems to me to be loss of UDP packets, therefore affecting DNS lookups and pages not loading reliably, mobiles claiming wi-fi connection but “no internet”)…

      Still trying to get them to take this seriously as they replaced the router and an engineer visit 6 months ago only showed that he had no problem [connecting back to a BT server, no doubt], while my connections via wi-fi, cables and from linux, Windows, Android and iOS are ALL similarly affected…. Oh, plus NowTV box and Android MBOX TV device… so this problem is probably not of my creation!

  5. Avatar FibreBubble

    My observations indicate very poor take up in new network areas. It’s a different market to the original 90s build cableco/BT straight shoot out.

    So I would expect any wholesale deals to focus on this area rather than any foray outside of town. After all Virgin ran away when BDUK subsidy money was in play for rural builds.

  6. Avatar George Lund

    That last 10% will be achieved via 5G anyway, I can’t believe people are still talking about 100% FTTP coverage.

    • Avatar AnotherTim

      5G won’t reach most rural areas for years yet – my area only got 4G within the last 2 years (and only EE and Three), so won’t be upgraded any time soon. I think most USO solutions will be 4G.

    • Avatar Jack

      Faster speeds = less of a distance for wireless. They’ll have to install fibre to every street in the last 10% anyways to serv 100mbps+ for indoor coverage.

    • Avatar Fred

      Nope, don’t see that happening any time soon. Still only get coverage by one operator, Vodafone where I live and 3G only to boot. FTTH is a real possibility with Truespeed where I live if the last couple of people sign up (come on Truespeed, time for a bit of leg work and some door to door sales).

      Not holding my breath on the CDS / Gigaclear debacle. If I remember correctly a new, agreed schedule is due by the end of the month – not seen any news on that yet……

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