In the battle of the super-fast broadband in Britain, Virgin has upped the ante with its recent announcement of the planned rollout of next broadband infrastructure that supports speeds in excess of 400 Mbps.
According to Virgin sources, while the company is not planning to offer such extravagant speeds in the near future, it intends to make its equipment future proof. The company is however preparing to offer speeds of 100 Mbps before the end of this year, and has speeded up trials of its 200 Mbps service in Ashford.
The telecom giant has said that it is ready to deploy next generation customer premise equipment (CPE) which will be capable of supporting the faster speeds. Its current pool of 10 Mbps and 20 Mbps subscribers are provided with DOCSIS 2 modems, while 50 Mbps customers are given custom-built Ambit DOCSIS 3 modems. This latter group is expected to receive 400 Mbps-capable modems by the end of this year.
Currently, the 50 Mbps group consists of around 70,000 subscribers.
Virgin’s announcement intensifies its competition with BT in the super-fast broadband segment, a segment that that heating up fast. BT is currently deploying fibre-to-the-cabinet (40Mbps) and fibre-to-the-home (100Mbps) solutions to 65% of the British population. Virgin already offers 50Mbps speeds to almost 50% of the households, and is confident that it will “stay a step ahead” of the competition.
Virgin is currently exploring three strategies for expanding its broadband footprint. It has said that the first two - one being to connect homes that were omitted from the original network but is nearby its footprint, and the other to connect new housing developments - would lead to 500,000 new homes being covered. Both of these options will be based of hybrid-fibre coax (HFC) network, the architecture Virgin’s current national network is based on. The third strategy is to get homes hooked up to fibre-optic cable via distribution poles. Virgin has also said it is exploring the possibility of using electricity ducts to get fibre closer to homes.
While Virgin Media will predominantly use the third strategy in the future, at present it remains focused on the HFC options.
Not all experts are optimistic about Virgin’s plans however. Tim Johnson, chief analyst at Point Topic, expressed concerns of network expansion trials not yielding any further rollout.
He points out that Virgin’s strategy is dependent on their financial situation, and it makes financial sense for them stick with their current network. The current infrastructure “is only there because £10bn has been written off for the cost of the network”, he said.
Johnson adds that Virgin’s approach has always been more cautious, with the priority being to increase revenue and shareholder earnings, rather then expanding their network and reaching individual customers.
But regardless of its intention and strategies, Johnson said that inherent limitations of cable architecture will mean that Virgin will continue to face problems with its upstream capacity.