Virgin Media’s plans to do a BT with its fibre network

According to some ‘secret plans’ leaked in yesterday’s Guardian, quad play provider Virgin Media are apparently intent on opening up their fibre optic cable network to rival providers. The article details how the fibre provider has “plans to open up its cable network to rival telephone and broadband companies” in around 18 months’ time, loosely following BT’s Openreach template.

This move would see the likes of Sky, O2 and the Carphone Warehouse offer fast cable broadband services where available alongside their more traditional copperwire ADSL services.

BT is already busy setting up a fibre network of its own, which is not due to be complete until 2012. If Virgin Media were to open up their network before then, BT could in theory get its customers signed up to cable on the Virgin network, and then migrate them across to their own lines once the network is up and running.

The Guardian piece quotes an unnamed US investment bank analyst saying: “Letting rivals use its wires for a fee makes commercial sense. And it could also keep the regulator off the company’s back.”

In 2005, BT set up Openreach at the behest of Ofcom, the telecoms regulator. Local Loop Unbundling, or LLU, the process of allowing rival providers to install their equipment in BT exchanges has soared in the UK since then. At the height of the spat between Sky and Virgin, the satellite TV broadcaster and ISP suggested to Ofcom that the Virgin Media cable network should be opened up to the competition.

Link: [Guardian]

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