Liberty Global Preps Broadband Blitz
Seeking to join the growing Gigabit movement, Liberty Global is preparing to start rolling out DOCSIS 3.1 technology in the UK and other parts of Europe as early as this summer.
Liberty Global Inc. (Nasdaq: LBTY), by far the largest cable operator in Europe and one of the largest MSOs in the world, spelled out its €3 billion ($4.6 billion) manifesto Friday for storming the British Isles with more high-speed broadband lines. Directly taking on fixed-line incumbent BT Group plc (NYSE: BT; London: BTA), Liberty Global explained how its Virgin Media Inc. (Nasdaq: VMED) unit intends to wire up to 4 million homes and businesses and extend its hybrid fiber-coax (HFC) footprint to nearly 17 million premises, or two thirds of the nation, by 2020. (See Virgin Media Plots £3B Invasion of BT Turf.)
But, as part of that presentation, Liberty Global also highlighted its plans to introduce the next-gen DOCSIS 3.1 cable broadband spec in its 14-nation European footprint, beginning in the second half of the year. The plans call for trials of 1 Gig service using D3.1 and then ramping up downstream speeds to the spec's 10 Gbit/s limit sometime after commercial deployments start.
Speaking on the company's fourth-quarter earnings call with analysts, Liberty Global CEO Mike Fries and Virgin Media CEO Tom Mockridge said DOCSIS 3.1 will play a big role in Virgin Media's program to expand its broadband reach in the UK. In addition, they said, Virgin Media will rely on new and deeper fiber builds, in many cases extending the fiber lines all the way to the customer's premise.
"It is an evolution of our current network," Fries said. "There will be lots of fiber and no new copper."
Under its new "Project Lightning" program, Virgin Media aims to offer top data download speeds of 152 Mbit/s to new broadband subs initially, at least twice as fast as the top speeds of such leading rival providers as BT, British Sky Broadcasting Group plc and TalkTalk . Then it intends to boost speeds much higher, at least partly with the help of D3.1.
Liberty Global and Virgin Media officials did not disclose where they will launch DOCSIS 3.1 service first, or which vendors' equipment they will be using to do so. But Virgin Media has been testing 1 Gig service in the village of Papworth in Cambridgeshire since last September.
Currently, Liberty Global's broadband speeds top out at 500 Mbit/s downstream in three European countries, with the highest speeds in most of its European markets ranging between 150 Mbit/s and 250 Mbit/s downstream. Company executives say their average European broadband household now receives about 70 Mbit/s service and consumes about 70 Gigabytes of data each month.
Liberty Global and Virgin Media officials are especially counting on the higher data speeds to make a difference in the UK, which has lagged behind other European nations in broadband rates. Based on several small field trials that they have conducted in Glasgow, Sunderland and Teeside, where they have achieved 23% penetration in just six months, they are seeking to reach 39% penetration of the overall broadband market in three years, potentially expanding the size of the broadband market as well.
"Generally we have 50% market share and 40% penetration rates in our cabled areas today," Mockridge said, while BT typically has just 20% market share in those regions. "When we're face-to-face, we have a pretty good track record of beating BT because our product is so much better."
Nevertheless, Virgin Media is still playing runnerup to BT in the UK broadband market, at least partly because BT covers the entire nation while Virgin Media covers only about half of it right now. Virgin Media reported adding 72,000 Internet subscribers in the fourth quarter, boosting its total sub count to more than 4.5 million. But BT did even better in the fall period, netting 119,000 broadband customers to lift its sub total to nearly 7.9 million.
Besides rolling out DOCSIS 3.1 and installing more fiber lines and extensions, Liberty Global intends to increase its wireless broadband reach throughout Europe. Plans call for doubling the company's number of WiFi hotspots from about 5 million right now to 10 million by the end of the year.
— Alan Breznick, Cable/Video Practice Leader, Light Reading