Posted: 05th May, 2009 By: MarkJ
UK ISP and TV operator Virgin Media (VM) has allegedly developed secret plans to make its broadband and telephone platform more accessible, which could involve opening its cable network up to wholesale access by rival providers, such Sky and O2 etc. The move, which has been denied by Virgin (see below), would be designed to increase revenue and avoid future regulatory pressure on the matter.
The Guardian's article also suggests that such a network could put added pressure on BT by potentially undercutting its wholesale services and pricing. The template for such a platform is likely to be BT's Openreach division, which is responsible for ensuring that all rival operators and ISPs have equality of access to BT's local network.
However unlike BT, which was once a national incumbent run by the state and held a monopolistic position with access to UK households nationwide, Virgin Media has always been an independent commercial operation and never held the same status. Still, such a move would not be without its difficulties, as the article explains below:
One of the stumbling blocks in Berkett's plan to open up the network in about 18 months' time is that Virgin Media will need to install expensive new technology to upgrade lines and make them user-friendly for third parties. But analysts said that if the economy improves and the company's share price rebounds, Virgin Media could raise additional debt or tap shareholders for extra funds.
It would certainly be an interesting move for VM, which has always seemed to resist becoming a supplier. Indeed it wasn't long ago that Virgin Media was gearing up to sell some or all of its business before the worsening financial climate conspired to make such a move very difficult.
UPDATE - 3:35pm:Virgin Media has issued us with the following statement:
A Virgin Media spokesperson said: "The report in the Guardian does not reflect Virgin Media's position and we have no plans to develop a wholesale proposition. In the context of the government's digital Britain initiative and Ofcom's recent review of next generation access, we have considered a range of strategic options but currently remain focused on delivering market leading retail services."