Virgin Media superfast broadband to be launched

3 November, 2007:

Virgin Media, the leading cable operator in the United Kingdom, is launching a trial of what the company calls superfast broadband speeds.

Neil Berkett, chief executive of Virgin Media, has admitted that this is being done in order to attract customers since the company cannot compete with rival cable operator BSkyB in the pay-TV market, according to media reports.

Neil Berkett announced at a Media Guardian broadcast summit recently that Virgin Media would promote its broadband as its “hero” product after the company having been involved in a fierce dispute with BSkyB earlier in 2006. The dispute resulted in BSkyB withdrawing its key channels from Virgin Media.

Media reports quoted Neil Berkett as saying that “it had become especially difficult for Virgin Media to compete with Sky in the pay-TV market” and that the board had approved Berkett’s decision to concentrate on Virgin Media’s broadband offering.

Virgin Media, according to Berkett, is in a better position to compete on broadband as it already offers speeds of up to 20 megabits per second to some customers and has successfully tested 50 megabits.

BSkyB currently offers broadband speeds of up to 16 megabits. BT offers 8 megabits now, but has plans to raise it to 24.

Virgin Media is also planning to offer services such as HDTV on demand.

Virgin Media was launched earlier in 2007 following the merger of NTL, Telewest and Virgin Mobile.

Media analysts say that Virgin Media has lost around 40,000 customers since its dispute with BSkyB, which is owned by media tycoon Rupert Murdoch. BSkyB had withdrawn its main channels off the Virgin Media network after efforts to settle the dispute failed.

The television channels taken off Virgin Media by BSkyB included Sky News and Sky One. The withdrawal deprived the customers of Virgin Media of highly popular shows like 24, Battlestar Galactica, and Lost.

Ofcom, the media regulator of the United Kingdom, has launched an investigation into the pay-television industry in the country after BSkyB’s rivals, including Virgin Media, accused BSkyB of trying to eliminate competition.