{"id":38088,"date":"2024-05-15T08:00:59","date_gmt":"2024-05-15T07:00:59","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=38088"},"modified":"2024-05-14T13:23:11","modified_gmt":"2024-05-14T12:23:11","slug":"opensignal-examines-the-impact-of-virgin-media-uk-going-wholesale","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2024\/05\/opensignal-examines-the-impact-of-virgin-media-uk-going-wholesale.html","title":{"rendered":"Opensignal Examines the Impact of Virgin Media UK Going Wholesale"},"content":{"rendered":"

Network benchmarking firm Opensignal<\/a> has published a new report that attempts to analyse the “user experience<\/em>” impact of Virgin Media<\/a>’s (VMO2) decision to open up their existing fixed broadband ISP network to wholesale (here<\/a>) via a new business (NetCo), which is expected to be introduced during the second half of 2025.<\/p>\n

Just to recap. Virgin Media<\/a>\u2019s existing gigabit-capable broadband network covers a shade over 16 million UK premises via a mix of different fixed line technologies, albeit primarily Hybrid Fibre Coax<\/strong> (HFC) and some Fibre-to-the-Premises<\/strong> (FTTP<\/a>) lines (using both Radio Frequency over Glass (RFoG) or XGS-PON). The operator is also working to upgrade their entire HFC network (c.14.3m premises) to FTTP<\/a> (XGS-PON) by 2028.<\/p>\n

NOTE:<\/strong> Virgin are currently expanding their coverage beyond 16.2m premises by using nexfibre<\/a>’s network, which shares some of the same parentage with VMO2 but is a wholesale-only network provider.<\/div>\n

However, Virgin Media<\/a>’s current network is closed, which means that only they (vertical integration) can sell broadband packages over it. Suffice to say that the recent decision to open this network up to wholesale by rival ISPs is a significant, albeit long-anticipated, development that could potentially give Openreach<\/a> a major new competitor (Virgin and nexfibre<\/a> combined will bring FTTP<\/a> to 23 million premises or c.80% of the UK by 2028).<\/p>\n

At present, it’s still far too early to judge what kind of impact this will actually have on the wider UK telecoms market, particularly since we don’t yet know anything about the kind of products, services or product flexibility they’ll be able to offer partner ISPs. Major question marks also exist over issues of cost, the scope for exclusivity agreements, and whether or not all ISPs will be treated equally and fairly by the new NetCo.<\/p>\n

The User Experience Analysis<\/strong><\/span><\/h3>\n

By comparison, Opensignal’s analysis<\/a> attempts to compare the fixed broadband experience of existing VMO2 users against those users on the major Openreach<\/a> tenant ISPs that aren\u2019t owned by BT<\/a>. It finds that within VMO2\u2019s footprint, VMO2 users have, on average, a “better fixed broadband experience than those on the major ISPs that are Openreach<\/a> tenants<\/em>“.<\/p>\n

\"Opensignal-Virgin-Media-O2-experience-vs-big-UK-ISPs\"<\/p>\n

However, the smaller footprint of VMO2’s network is also said to imply that “NetCo will \u2014 at least initially \u2014 only be able to compete for wholesale ISP tenants in a limited capacity, with a focus on urban and suburban areas<\/em>“. This is to be expected, given Virgin Media’s pre-existing focus on urban areas, but then 16.2 million premises isn’t all that “limited<\/em>“, unless they decide to initially only launch wholesale via the XGS-PON side of things to keep it aligned with nexfibre<\/a> (the exact plan is still subject to some debate).<\/p>\n

In addition, most Sky Broadband<\/a>, TalkTalk<\/a> and Virgin Media users within the latter\u2019s footprint place within the two lowest speed brackets. This is especially pronounced for TalkTalk<\/a> and Sky Broadband<\/a>, with 71.4% and 66%, respectively, of Opensignal<\/a>’s users\u2019 download speeds placing in the bottom two brackets. Similarly, Virgin Media users in the slowest speed bracket also have a “more consistent experience<\/em>” than those on Sky and TalkTalk<\/a>.<\/p>\n

The full report delves into all of this testing in a lot more detail, although we have significant doubts about the usefulness of this approach. This is because it’s generally unwise to try and predict future user experience by looking at Virgin Media’s own retail broadband performance, which may not be all that reflective of the services that NetCo<\/strong> ends up offering – wholesale is often much more complex and separate than this can reflect.<\/p>\n

Much will admittedly depend upon the details of how NetCo actually design their wholesale proposition and how much flexibility they give to ISPs to differentiate themselves. But there can often be significant performance differences between retail and wholesale on the same physical network, which is often at least partly defined by the partner ISPs own network setup, product choices and capacity links etc.<\/p>\n

The other difficulty for Virgin Media is that their standard retail pricing, particularly post-contract (after discounts), often comes out more expensive than many of today’s modern alternative networks. NetCo will thus need to be more competitive than that, but quite how this will be squared with the need to protect revenue and limit churn from Virgin’s retail base is as yet unclear.<\/p>\n

Meanwhile, truly independent ISPs often find adopting a new network provider to be both a very complex and expensive process. Providers that make this leap also have to figure out a way of creating a streamlined set of packages for consumers, ideally without causing confusion with their existing services (i.e. too many different packages and prices make the market much harder to figure out).<\/p>\n

Suffice to say, we’d take Opensignal<\/a>’s report with a pinch of salt, since it may not be particularly reflective of NetCo’s wholesale proposition and the wider market will continue to change a fair bit by the second half of 2025.<\/p>\n","protected":false},"excerpt":{"rendered":"

Network benchmarking firm Opensignal has published a new report that attempts to analyse the “user experience” impact of Virgin Media’s (VMO2) decision to open up their existing fixed broadband ISP network to wholesale (here) via a new business (NetCo), which is expected to be introduced during the second half of 2025.<\/p>\n","protected":false},"author":1,"featured_media":23855,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[474,419,405,56,32,84,66,74,475,96],"class_list":["post-38088","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-bt","tag-docsis3-1","tag-ee","tag-fttp","tag-o2","tag-plusnet","tag-sky-broadband","tag-talktalk","tag-virgin-media","tag-vodafone"],"share_on_mastodon":{"url":"https:\/\/mastodon.social\/@ispreview\/112443822215555361","error":""},"yoast_head":"\nOpensignal Examines the Impact of Virgin Media UK Going Wholesale - 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