Virgin Media Plots 3B Invasion of BT Turf

Regulatory implications
Could all this subject Virgin to further regulatory scrutiny? As the universal service provider, BT has been forced to open its network to rivals like TalkTalk and Sky. Virgin has been under no similar compulsion, but this could start to look unfair as its network presence grows.

Virgin is certainly not anticipating any regulatory changes, according to its spokesperson, who points out that BT is still the only infrastructure player offering a nationwide service.

Yet coverage is not the overriding factor, according to UK regulatory authority Ofcom . "Virgin's present in half the country but within those markets there is very strong competition," an Ofcom spokesperson tells Light Reading. "We'll be looking at this market again in a couple of years and that's when we'll assess all the operators to see if market power positions have changed."

"If the rollout were to increase Virgin's market share that could affect Virgin's assessment but we're a long way off coming to any conclusions there," he says.

A subsidiary of international cable company Liberty Global Inc. (Nasdaq: LBTY), Virgin intends to pay for the network extension -- dubbed Project Lightning in its press release -- through debt financing.

The Project Lightning announcement came on the same day Liberty reported results for the 2014 financial year, revealing that Virgin fell further behind BT in the broadband market during the October-to-December quarter. (See BT, EE Put Squeeze on Broadband Rivals.)

While BT's retail business picked up another 119,000 broadband customers in the last three months of 2014, Virgin could manage only 58,700.

BT now serves around 7.59 million broadband customers, while Virgin has about 4.54 million. As the cable operator's rollout gathers pace, investors will be watching closely to see if that gap starts to close.

Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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iainmorris 2/13/2015 | 7:23:03 AM
Premier League rights One has to wonder whether BT's heavy spending on rights to screen soccer matches will have any impact on its broadband plans. Nearly £1 billion on Premier League rights is quite a bit more than analysts were expecting, if not anywhere near what Sky was forced to spend to hold off a BT attack. 
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