VM wants to expand Project Lightning

[1andrew1]

"Tom Mockridge, the chief executive of Virgin Media, is determined to offer millions more homes cable as demand for faster internet access continues to increase, City sources said.
He has appealed to the board of Liberty Global for further funding for Project Lightning, a £3bn scheme to connect an extra 4 million homes and businesses to the cable network by 2020, increasing coverage from around 50pc to two-thirds of UK premises."
http://www.telegraph.co.uk/business/...-more-network/

[Taf]

I.E. "expand the network" ?

[1andrew1]

Originally Posted by Taf

I.E. "expand the network" ?

Yes. It's expanding the fixed line network already through Project Lightning which many Cable Forum readers are already aware of.
The headline indicates that VM wants more fixed line expansion on top of its existing plans which are not to be confused with its wireless expansion plans through the reported Arqiva wireless acquisition.

[Ignitionnet]

It was always the plan that this phase of the project would just be the first one with subsequent phases to follow if the commercial case was right.

As long as the costs per premises are kept under control and the take-up justifies it there will hopefully be more investment.

[Horizon]

That telegraph article has a picture of the big white chief himself aka John Malone (in the background, on the far left) with Mike Fries (in the background, far right).

They're very serious about more expansion..... which gets me thinking if they want a network that covers more or less most of the country, will they then open up that network to other operators and make dosh from renting their cables and/or ducts out now?

[pip08456]

Originally Posted by Horizon

That telegraph article has a picture of the big white chief himself aka John Malone (in the background, on the far left) with Mike Fries (in the background, far right).

They're very serious about more expansion..... which gets me thinking if they want a network that covers more or less most of the country, will they then open up that network to other operators and make dosh from renting their cables and/or ducts out now?

No, why should they? Unlike BT VM's network has totally been privately funded, BT on the other hand inherited a publically funded network.

[Horizon]

.... I know and VM have always said it is unlikely they would open up their network. But, if a cable customer cancels services and goes somewhere else, wouldn't it be better for VM to open up their network to their competitors? That way they can still earn some money even from cancelled subscribers who have gone to competitors but using VM's pipes?

(playing devil's advocate here)

[1andrew1]

Originally Posted by Horizon

They're very serious about more expansion..... which gets me thinking if they want a network that covers more or less most of the country, will they then open up that network to other operators and make dosh from renting their cables and/or ducts out now?

They might do a deal with TalkTalk or Vodafone to discourage them from investing in their own broadband infrastructure. If they capped the speeds at BT speeds then the two services may not compete so directly.

[vm_tech]

You say about opening their network up to other providers, depends on what context you mean, because in effect they already have

http://www.virginmediabusiness.co.uk...dia-Business-/

[pip08456]

Originally Posted by vm_tech

You say about opening their network up to other providers, depends on what context you mean, because in effect they already have

http://www.virginmediabusiness.co.uk...dia-Business-/

Exactly, backhaul services are and will continue to be avalable to a host of companies one way or another. That is a totally different service.

However I think Horizon was referring to ducting, cabinet access etc.

[vm_tech]

I can't see it personally. HFC is a totally different beast. As an example, say VM allow company X to use their network. If a piece of equipment provided by company X then causes noise causing an outage, would VM then charge X for the resources/compensation for the customer? I think it would be way too difficult to manage. So much other stuff in the background as well. If a customer from X has an issue, they ring through, will VM want to give the access to the CMTS for fault diagnostics? I just can't see it being practical

[pip08456]

Originally Posted by vm_tech

I can't see it personally. HFC is a totally different beast. As an example, say VM allow company X to use their network. If a piece of equipment provided by company X then causes noise causing an outage, would VM then charge X for the resources/compensation for the customer? I think it would be way too difficult to manage. So much other stuff in the background as well. If a customer from X has an issue, they ring through, will VM want to give the access to the CMTS for fault diagnostics? I just can't see it being practical

Neither can I.

I was adressing Horizon's question.

I agree with you, it will never happen on the grounds you have put forward.

[Pierre]

Originally Posted by vm_tech

You say about opening their network up to other providers, depends on what context you mean, because in effect they already have

http://www.virginmediabusiness.co.uk...dia-Business-/

That's not opening up their network that's providing carrier services, same as all carriers do.

[Ignitionnet]

Originally Posted by Horizon

They're very serious about more expansion..... which gets me thinking if they want a network that covers more or less most of the country, will they then open up that network to other operators and make dosh from renting their cables and/or ducts out now?

No. The coverage doesn't change the case, or lack of, for such an action. It would probably not be tolerated for them to wholesale access to their network on discriminatory terms in this climate either. I'd say there's a strong chance once they start allowing it that they lose any chance of claiming no Significant Market Power.

As an example of the opposite Deutsche Telekom obtained regulatory concessions when they deployed VDSL so that only they could sell it for a while, no wholesale.

VM get about 40% of the business in their passed areas. Offering a wholesale product, even where the wholesale charge is 50% of their total price and they retain 40% of the retail sales, both very optimistic, they would need 54% of the broadband market to receive the same revenue, and would have similar running costs per customer due to the equipment, OSS, ordering systems, capacity, hardware, etc, that'd be needed.

Allow people to buy the broadband elsewhere you face the prospect of Sky, BT Vision, TalkTalk TV, etc, being used instead of the VM product.

Add a ton of restrictions to the wholesaling the obvious question becomes what's the point?

VM and their predecessors have always wanted to avoid wholesaling unless on extremely favourable terms for them.

[Horizon]

..... my thinking here is that if at some point in the future tv becomes simply another part of the internet "broadcast" using IP standards. If all the DTT spectrum gets sold off to mobile operators and satellite capacity becomes too expensive. Then tv will need to be delivered over cable. (unless it does get pumped out from lightbulbs??) And I believe the bulk of tv watched will be on-demand/streaming, rather than watching traditional tv channels.

VM would be in a strong position and as 1andrew1 suggested, VM might want to discourage others from building their own cable networks. If VM offered faster speeds than Sky and could somehow prevent Sky from offering too competitive products themselves, it might be workable. But I suppose Ofcom would jump in at that point.

As you say, VM would need over 50% penetration to make a profit.

I just think that at some point in the next 20 years there will be some kind of "pinch point" where all tv providers/ISPs/telcos will need to use fibre cable for the reasons I've already stated.

At the moment, there are only 2 consumer "cable" networks and only one of them, BT's, is nationwide. Unless Sky/talktalk etc start investing billions into building their own infrastructure, which I don't see happening, then this pinch point will eventually happen. VM and BT have networks, all the others don't, which puts them in a strong position.

Very soon we may get a pinch point in regards to energy. Tony Blair put off the decision to build new nuclear plants and soon, as old power stations keep closing, demand will outstrip supply. I believe this will happen in the tv/broadband arena too.

---------- Post added at 00:47 ---------- Previous post was at 00:47 ----------

Originally Posted by pip08456

Exactly, backhaul services are and will continue to be avalable to a host of companies one way or another. That is a totally different service.

However I think Horizon was referring to ducting, cabinet access etc.

Yep.

---------- Post added at 00:50 ---------- Previous post was at 00:47 ----------

Originally Posted by vm_tech

I can't see it personally. HFC is a totally different beast. As an example, say VM allow company X to use their network. If a piece of equipment provided by company X then causes noise causing an outage, would VM then charge X for the resources/compensation for the customer? I think it would be way too difficult to manage. So much other stuff in the background as well. If a customer from X has an issue, they ring through, will VM want to give the access to the CMTS for fault diagnostics? I just can't see it being practical

Of course this is exactly what happens with Openreach now between them and all the other companies that gain access to BT's infrastructure. Which is why I don't think that current setup is sustainable into the future.