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UPDATE2 Virgin Media UK Launch 100Mb Service and Top 4.24m Broadband Users

Posted: 27th Oct, 2010 By: MarkJ
virgin media uk 100mb superhubvirgin media uk 100mb best broadbandCable giant Virgin Media UK has today reported its latest Q3-2010 results and officially taken the wraps off their new superfast 100Mbps broadband package. In total the operators ISP division managed to attract 4,242,900 broadband subscribers, which represents quarterly growth of +35,100 (net additions); up from +28,100 in Q2. However this is still some way off Q1's strong +76,200.

As per usual the bulk of new broadband additions were to Virgin's strong Cable Modem (DOCSIS/EuroDOCSIS3) based platform, which accounts for 3,969,800 of the total (up +33,800 in Q3). By comparison the weak Virgin.net (Virgin National) ADSL2+ platform was home to 273,100 customers, a rise of just +1,300 in the quarter and down on Q2's +2,200. At this rate it will soon be in decline again.

However today's big news is Virgin's new superfast 100Mbps (Megabits per second) broadband service (10Mbps uploads). Disappointingly the service itself has not yet gone live, although existing and potential customers will be able to pre-register for it (prices detailed at the bottom of this news). The service will be rolled out across Virgin's network throughout 2011 but will be first available in parts of London, the south east and Yorkshire from the start of December 2010.

Virgin Media is also continuing to trial 200Mbps speeds in customers' homes, although we probably won't see that surfacing until late 2012. They also recently began upgrading upload speeds, with some packages getting up to 5Mbps (here), while trials of its future 20Mbps upload service remain on-going.

The Chief Executive Officer of Virgin Media, Neil Berkett, said:

"Our continued focus on exploiting our strategic advantages with the resulting multiple opportunities for revenue growth, as well as robust financial discipline has delivered another strong financial performance this quarter. We are extending our lead in broadband even further with the imminent availability of 100Mb as consumer demand for consistently faster broadband grows.

The launch of our 100Mb service is a significant milestone in the UK’s broadband evolution and a vivid illustration of the power of our next generation network. From establishing the UK’s first ever broadband service in 2000 to the launch of 100Mb in 2010, in the space of just ten years, Virgin Media has led the greatest developments in digital Britain. The world of possibilities that broadband will enable is set to explode and we’re excited about the innovations we can bring to consumers in the next decade."

Virgin notes that more than 708,300 customers now subscribe to its 20Mb or 50Mb cable broadband services (18% of the total cable broadband base), although the 50Mb package alone holds just 91,600 of that total (up 23.8%, which is slower than the 28% growth seen in Q2).

This does rather beg the question, why launch a 100Mbps package when the 50Mbps is effectively still in the midst of finding its footing, due in no small part to its higher cost and the limited demand. The reason is of course BT , which launched its own 40Mbps fibre optic ( FTTC ) based broadband service this year and will bring out a 110Mbps FTTP service in the first half of 2011 (details). It was originally supposed to be 100Mbps but BT needed to go one further than Virgin and added an extra +10Mbps.

However BT is at a disadvantage here. Virgin Media will be able to reach just over half of the entire country with its 100Mbps package within the space of a single year, yet it will take BT until summer 2012 just to reach a tiny 2.5m UK homes with 110Mbps.

We suspect that there won't be huge demand for the new package since Virgin's existing 50Mbps is more than the vast majority of consumers would need. Virgin will also need to be careful because other FTTH 100Mbps players are entering the market with competitive prices.

Cable revenue in the third quarter was up 5.6% at £662.6m reflecting 3.7% growth in cable ARPU to £46.38 and 1.9% growth in the cable customer base. Non-cable revenue was up 39.6% at £20.1m due to the launch of wholesale line rental in August 2009, which allowed Virgin to sell a telephone line rental bundled with its Virgin.net broadband and voice products.

UPDATE 9:02am

Virgin just sent us some additional 100Mbps package details and we should have a picture of the new hardware soon too have also added a picture of the new hardware. As well as providing 100Mb download speeds, the service will also deliver 10Mb upload speeds.

The new 100Mb package also comes with a new custom built energy efficient combined modem and wireless ‘N’ router (SuperHub with Gigabit network connections), with the potential to deliver speeds of up to 400Mb as new services roll-out in the future. A typical family will be able to get the new ultrafast service for as little as £35 a month when bought in a bundle, or just £45 per month when bought as a sole product.

The roll-out is expected to be completed by mid 2012.
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