{"id":28997,"date":"2021-10-26T11:37:27","date_gmt":"2021-10-26T10:37:27","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=28997"},"modified":"2021-10-26T13:05:12","modified_gmt":"2021-10-26T12:05:12","slug":"steps-taken-toward-splitting-virgin-media-from-its-uk-network","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2021\/10\/steps-taken-toward-splitting-virgin-media-from-its-uk-network.html","title":{"rendered":"Steps Taken Toward Splitting Virgin Media from its UK Network"},"content":{"rendered":"

A weekend report claims that Liberty Global has hired consultancy firm Accenture PLC to develop plans for the separation of their fixed broadband network assets from their retail ISP products, which is said to be supported by Virgin Media<\/a>’s merger partner Telefonica (O2<\/a>) in the United Kingdom.<\/p>\n

At present, it’s widely known that Virgin Media<\/a> has long held an ambition to launch wholesale products as part of their future plan (here<\/a>), which ideally needs the support of a major residential broadband ISP – other than VMO2 itself – in order to be taken seriously.<\/p>\n

Sky Broadband<\/a> has often been linked with such talks, which may include a co-investment deal, although TalkTalk<\/a> and Vodafone<\/a> are also in the frame. But securing such deals tends to demand awkward exclusivity arrangements, which could hinder the wider uptake of VMO2’s proposed wholesale products by other ISPs and are hard things to agree on.<\/p>\n

However, less clear is what kind of structure VMO2 might adopt for their wholesale products. For example, the operator could provide third-party ISPs with access to their entire UK network (mostly Hybrid Fibre Coax<\/strong> for 14.3 million premises), or only their more recent Fibre-to-the-Premises<\/strong> (FTTP<\/a>) based estate (over 1 million premises).<\/p>\n

In the long run that HFC and FTTP<\/a> difference may be less relevant, given that VMO2 intends to upgrade all of their existing HFC to XGSPON<\/strong> based FTTP<\/a> by 2028 (here<\/a>). On top of that they also hold an aspiration to extend their FTTP network to reach up to another c.7-8 million UK premises within the next 5-years, which by completion could make their full fibre coverage roughly comparable to that of Openreach<\/a>’s planned build.<\/p>\n

NOTE:<\/strong> A network expansion on that scale could place VMO2 into a position of Significant Market Power (SMP), which may cause Ofcom<\/a> to require a wholesale product whether VMO2 wanted it or not.<\/div>\n

The operator could then take one of two different approaches to all this. On the one hand, they could try keeping their network and retail business under the control of a single brand \/ company, but rival ISPs taking their wholesale products might find such vertical integration to be a difficult pill to swallow due to concerns around fair competition – much like BT<\/a> in the pre-Openreach<\/a> years – and that may stunt adoption.<\/p>\n

The alternative, which Liberty Global have been considering since long before the O2<\/a> merger was announced (here<\/a>), would be to separate (split) their network access and retail businesses (much like BT<\/a> and Openreach<\/a> have done). In essence, VMO2 would become somewhat of an anchor tenant, or co-anchor tenant with another ISP, for their wholesale network that would itself exist as a semi-separate company. Establishing the complex rules of play around all of this is not easy.<\/p>\n

A recent report from Bloomberg<\/a><\/strong> appears to indicate that both of VMO2’s founding parents – Liberty Global and Telefonica UK (O2<\/a>) – appear to favour a network split and have reportedly hired consultancy firm Accenture PLC<\/strong> to sort out the finer details (this may apply to Liberty’s other European networks too).<\/p>\n

Any move into wholesale would almost immediately create a major market competitor for Openreach, which is good for UK ISPs and consumers. On the flip side, this may require Ofcom<\/a> to review some of their market regulation, since Openreach would have even less influence over certain aspects of the market.<\/p>\n

Admittedly there is one group, other than Openreach, that wouldn’t be too happy to see VMO2 going wholesale. Alternative network (AltNet) providers, especially those like CityFibre<\/a> that operate a similar build and wholesale model in urban areas; they would no doubt feel some added competitive pressures from such a move.<\/p>\n

Otherwise, the wait goes on for some kind of formal announcement from VMO2.<\/p>\n","protected":false},"excerpt":{"rendered":"

A weekend report claims that Liberty Global has hired consultancy firm Accenture PLC to develop plans for the separation of their fixed broadband network assets from their retail ISP products, which is said to be supported by Virgin Media’s merger partner Telefonica (O2) in the United Kingdom.<\/p>\n","protected":false},"author":1,"featured_media":28998,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[56,32,475],"class_list":["post-28997","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-fttp","tag-o2","tag-virgin-media"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nSteps Taken Toward Splitting Virgin Media from its UK Network - ISPreview UK<\/title>\n<meta name=\"description\" content=\"A weekend report claims that Liberty Global has hired consultancy firm Accenture PLC to develop plans for the separation of their fixed broadband network\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2021\/10\/steps-taken-toward-splitting-virgin-media-from-its-uk-network.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Steps Taken Toward Splitting Virgin Media from its UK Network - 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