Liberty Global Results out May 9th.

[Pierre]

Originally Posted by 1andrew1

Except retail 4G which LGI have from Chile to the Netherlands and shortly in Eire but not the UK.

They'll get that eventually from EE.

---------- Post added at 13:34 ---------- Previous post was at 12:54 ----------

Well seems the Three/ O2 merger has been blocked by he EU, so let's see if Fries puts his money where his mouth is?

[1andrew1]

Originally Posted by Pierre

They'll get that eventually from EE.

---------- Post added at 13:34 ---------- Previous post was at 12:54 ----------

Well seems the Three/ O2 merger has been blocked by he EU, so let's see if Fries puts his money where his mouth is?

I suspect VM will not acquire it but that Iliad-Free Mobile of France may be interested.

[Horizon]

Originally Posted by 1andrew1

Not ruling out O2 UK bid

http://www.ft.com/cms/s/0/6d0da158-1...#axzz48FCCBX00

The O2/3 merger has been blocked:

http://www.bbc.co.uk/news/business-36266924

Just listening to the webcast again and I have changed my mind on what I said yesterday about Liberty/VM bidding for 02.

Mike Fries was VERY cagey when asked about this. He kept speaking about wanting to keep his options open and alluded to the fact that VM could pick off some infrastructure if 02/3 did merge. But he did not deny that it COULD be an option. I think it IS now an option.

I reckon it'll be an all out fight between Sky and Liberty/VM for 02.

---------- Post added at 16:28 ---------- Previous post was at 16:06 ----------

Originally Posted by Kushan

Didn't those talks fall through a month or so ago?

No, all going ahead. The Vodafone/Liberty operations should be merged by the end of the year.

Originally Posted by Kushan

The problem is that Virgin can't just ramp up capacity without significant investment. They're only just about on top of the majority of the congestion they currently have, bumping the majority of users to 100Mbit would just cost them a lot of money and, if capacity isn't there, actually cause them to lose customers.

I do think Virgin is missing a trick with the landline pricing, but now that ISPs are going to be forced to quote the full price of broadband including telephone line (if required), Virgin could make a compelling argument that they're significantly cheaper than the competition. Perhaps with their VoIP offering, they could basically give you broadband without a landline for no additional cost. That would be an incredible win.

I agree. Hence, why they've launched a new hub with telephone sockets.

As for capacity, as I said, either VM ramp things up now or they'll lose the broadband advantage to BT. According to Media Boy, they have increased network capacity by 20%, but this is not showing in my area yet.

Either VM invest, build out to more homes, add in more capacity, or BT will.

Cable has always had the potential to be the best and has never lived up to that. I think the next few years will be critical for the cable industry aka VM.

A "little" thing like having no line rental and doing phone over the net, could just do it for VM and undercut the rivals.

[1andrew1]

Originally Posted by Horizon

A "little" thing like having no line rental and doing phone over the net, could just do it for VM and undercut the rivals.

I can't see that VM's technology can save them the revenue they would lose by not charging line rental given that it's a high margin offering. But every little cost-saving helps.
Agree with you on the cable roll-out. If VM doesn't, someone else will.

[Horizon]

... If you were to go into a price comparison site and find that VM services are £5-£15 cheaper with calls going over the net and no line rental, would you stick with BT, Sky, whoever you're currently with? I wouldn't.

I agree, line rental is a money maker for VM, "money for old rope" comes to mind, or should that be money for old copper.... But, and it is but, VM gain a lot of extra customers saving that £5 or whatever it would be and that would offset the lost revenue from axing line rental and the old copper telephone network.

BT can't offset line rental, that's a significant part of their business and at the moment, they don't have cable tv network to fall back on either.

[Pierre]

It is with a heavy heart that VM are moving to VoIP. The VM TDM voice network is a huge cash cow for them. But the infrastructure is old and all but obsolete. It won't be a quick change. VoIP services won't start appearing for at least another year, probably two. The programme won't be completed until 2025 when the last of the telco cabs will be removed.

[heero_yuy]

Citation please if possible.

Seems the logical way to go.

[Pierre]

Originally Posted by heero_yuy

Citation please if possible.

Seems the logical way to go.

Citation for what?

[heero_yuy]

Originally Posted by Pierre

Citation for what?

VM moving to VOIP?

[Pierre]

It's common knowledge within VM, the Voice Transformation Project.


No citation available, you'll have to take my word for it.

[1andrew1]

Originally Posted by Horizon

But, and it is but, VM gain a lot of extra customers saving that £5 or whatever it would be and that would offset the lost revenue from axing line rental and the old copper telephone network.

If the gain in customers would produce more profit than the loss of line rental then why would they not do it now? VM and others have teams of pricing analysts dedicated to getting the most profit out of their customer base and regularly run things like this across their yield models. The fact is, VM's competitors would respond, every company would be worse off and network expansion and other investment would be harder to justify.

[Horizon]

Originally Posted by Pierre

It is with a heavy heart that VM are moving to VoIP. The VM TDM voice network is a huge cash cow for them. But the infrastructure is old and all but obsolete. It won't be a quick change. VoIP services won't start appearing for at least another year, probably two. The programme won't be completed until 2025 when the last of the telco cabs will be removed.

Blimey. Not quite the speedy transition I had in mind.

Thanks for info.

---------- Post added at 20:36 ---------- Previous post was at 20:23 ----------

Originally Posted by 1andrew1

If the gain in customers would produce more profit than the loss of line rental then why would they not do it now? VM and others have teams of pricing analysts dedicated to getting the most profit out of their customer base and regularly run things like this across their yield models. The fact is, VM's competitors would respond, every company would be worse off and network expansion and other investment would be harder to justify.

The cable bosses up to now have been narrow minded, expansion of the network being the best example of this.

It costs money to expand, so they didn't. Result, customer base has been stagnant for years.

It'll cost money to move over to VOIP and going by the last reply, that process will take 10 years.

VM get money for doing nothing. Line rental is in effect a connectivity charge. They do nothing and earn loads of dosh from it. But its short sighted. They could've marketed their advanced cable network without old copper telephone technology and still undercut rivals on price. It would cost them initially, but I am certain they would gain in the long run.

Yes of course, competitors wouldn't stand still. BT are rolling out more fibre, but how many years and men up poles will that take? VM have an inbuilt advantage with their network that they they have never used, apart from a brief time when they were doing VOD and no one else was.

[Kushan]

Originally Posted by Horizon

VM get money for doing nothing. Line rental is in effect a connectivity charge. They do nothing and earn loads of dosh from it. But its short sighted. They could've marketed their advanced cable network without old copper telephone technology and still undercut rivals on price. It would cost them initially, but I am certain they would gain in the long run.

While I agree in spirit with what you're saying, I don't think Virgin is completely incentivised to get rid of the PSTN network. As others have stated, it's a huge cash cow, almost free money just by making it cheaper to take with broadband. To put it another way, say they only make £10 from line rental charges each month and broadband is £25 (example only). If they dropped line rental from the price, they'd realistically need to increase their customer base by about 30% to break even. That's not going to happen, certainly not overnight.

[Horizon]

.... but they needn't drop the whole cost of the line rental if it was axed. They could increase the broadband/voip option by say £5-£10, which would still undercut everyone. I bet many customers would switch to VM to save some pennies. BT can't match on price, because they don't have a cable tv network to fall back on, yet. BT need the line rental. VM don't.

Plus, how much cost is there in keeping the many telephone exchanges that VM have?

The "incentive" on VM as I see it, is, BT (and others) are rolling out more fibre and they have the resources and people to accelerate things further if they wish.

VM still has an advantage at the moment over rivals. They have a cable tv network, no one else does. But as soon as more fibre is laid by rivals, I expect FIOS-like tv services to be distributed along those fibres, in effect turning BT or whoever into cable tv companies.