Sky have been quick to respond to Virgin Media’s recent speed boost to their premier Size: XL package, by releasing this statement:
“Virgin Media is pushing up broadband prices at a time when dramatic savings are available from other providers. Sky customers can enjoy download speeds of up to 16Mb per second for just £10 per month - less than a third of the price of Virgin Media’s fastest service. No wonder that in the last three months of 2006, Sky added almost twice as many broadband customers as Virgin Media.”
The implication here is that the Virgin deal is something of a rip-off, but as many customers of discount broadband services have found out in the past, often to their chagrin, sometimes you really do get what you pay for. At peak times when the net is congested with many users mass-downloading MP3s and other files, the difference between a 16Mbps and 20Mbps speed could be crucial.
This statement has also renewed interest in a debate over which medium (cable or ADSL) is the most suitable for an internet connection. ADSL users are more reliant on their proximity to their local exchange than cable users, who are not affected by distance as such.
However as both types of service are heavily affected by peak-time traffic, ADSL connections can be advantageous if you live close to an exchange. Cable connection speeds are more consistent with the amount of traffic in your local area; i.e. if your next door neighbour is downloading several Gigabytes of MP3 and videos using the same bandwidth as you, then your net performance can suffer due to someone else’s downloading habits – ADSL users do not suffer from this. Maybe this unique problem with cable explains why Virgin, like many ISPs, are keen to clamp down on users who abuse the terms of their Acceptable Use Policy.
ADSL customers who are isolated from telephone exchanges may welcome Virgin Media’s cable services which may give Virgin an edge over the competition in the long run, as they are currently the main provider of cable broadband in the UK.
The Virgin cable network currently supplies it services to over 80% of the UK, whereas Sky’s digital TV footprint is something around 98%, and their broadband network coverage, according to their website is “currently 50% of UK population; due to rise to 70% in July 2007″.
Whilst it is true that Sky have added nearly twice as many broadband customers as Virgin, this could be attributed to the fact that not all Sky TV subscribers can get Sky Broadband, and as Sky Broadband is included free with a TV package, existing Sky viewers are offered the option to upgrade their telly deal with free broadband as the network reaches their area - Virgin can, for the moment, supply more customers with broadband than Sky.
Whichever way you spin Sky’s comment, what is clear is that the battle between the two media heavyweights did not end with the withdrawal of Sky channels from Virgin, and is not likely to be resolved anytime soon. This could see the introduction of more incentives, like the offer of faster speeds, from both sides which is great news for customers.
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