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UK's Virgin Media ups its data rate, CityFibre names its third city and the govt. mulls franchises

Speed test

  • UK ultra-fast broadband market seems to be moving
  • Two announcements today and talk of a government rethink

UK cable TV company, Virgin Media, today announced that it was upping the competitive heat in the UK broadband market by upgrading its already impressively fast home broadband service, VIVID 300, to 350 Mbit/s at no extra charge. The company currently offers broadband at 100, 200 and 300 Mbit/s. OK, so 50 Mbit/s on top of 300 Mbit/s is not going to be greatly noticeable, but it’s a sign that the marketing battle is heating up. By topping up its fastest service by 50 Mbit/s Virgin draws attention to the fact that its deal is the best on the market.

Coincidently (or not) Vodafone and UK fibre-digger, CityFibre, have announced that the Cambridgeshire city of Peterborough will be the third UK city to receive full-fibre broadband, courtesy of the deal signed between the two companies last year. Then they announced a construction plan involving 1 million homes by 2021 with an option to extend that to bring on a further 4 million homes by 2025. Vodafone gets exclusive marketing rights to homes as the build is rolled out, and presumably can also tap the fibre to connect its base stations as and when its 5G plans demand it.

Meanwhile, hot on the heels of the UK government’s voucher scheme to boost the demand for, and take up of, full fibre broadband (see - Free money for ‘full fibre’ connections: the UK government chips in), there are reports that the government is mulling a radical new approach to solving what it regards as the UK’s broadband deficit. According to the Daily Telegraph, there’s a radical shakeup under consideration to address those difficult to serve, more rural areas with the idea of assigning franchises - presumably on the basis that a lightly regulated monopoly in rural towns and villages will be better than no service at all.

The government may be looking back at the burst of investment and enthusiasm which greeted the franchising of Cable TV in the early 1990s. That opportunity sucked in interest from all over the world with foreign telcos from North America, Europe and Asia all entering into joint ventures to build a patchwork of cable systems. The franchises were gradually merged as the builds were completed and the businesses stabilised until today there is just one big franchise - Virgin Media.

Today the conditions are very different of course, not least because limited builds based on there being an ongoing competitive market on infrastructure, are already under way and the builders, including City Fibre, are alert to the dangers of new government initiatives that may weaken the business models that they’ve already pledged to see through. Whether the franchise idea, if it comes to fruition, will be seen as a threat or a further opportunity by them remains to be seen.

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