Ofcom Did Right Thing Over BT, Says Virgin Media

In an unexpected twist, Virgin Media has welcomed Ofcom's decision to remove any regulatory roadblocks that might hamper BT's £1.5 billion investment in a high speed fibre-optic network.

In a statement given to Techradar, a Virgin Media spokesperson said "Ofcom's statement strikes a sensible balance between the need for need to stimulate investment in next generation broadband and the need for competition," adding that "Virgin Media is spearheading the UK's transition to next generation broadband with the aggressive roll-out of its ground-breaking 50Mb service."

Back in December 2008, Ofcom praised Virgin Media when it launched its own 50Mb cable broadband line and although, BT's new network promises more competition in the future, it means that consumers can finally look forward to get very high speed broadband at an affordable price.

The £1.5 billion investment is a far cry from the estimated £16 billion cost that the Broadband Stakeholder Group put forward back in June 2008. This is because a large portion of BT's budget plans to roll out "Fibre to the Cabinet" rather than to the users' home, an intermediate rather than radical change in the mode of distribution of data.

As for Virgin Media, the company is way ahead of BT as Ofcom's own CEO acknowledged who said that "People say nothing is happening in the UK when it comes to super fast broadband. That just isn't the case- it's unfair to what Virgin have done. By the end of this year 50% of the UK will be covered with superfast broadband before BT have started."

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Our Comments

A quick way for BT to catch up with Virgin Media could be to introduce mainstream bonding to the market. This could in theory allow two lines to be merged together and therefore get both redundancy and added speed in one line. However, BT's line rental are still prohibitive compared to the price of one broadband package. Virgin Media's 10Mb line for example costs £25 including Line Rental and £31 for the 20Mb, with the 50Mb model rising to £46. Two 24Mb ADSL2+ lines would need to cost under £23 each (including Line Rental).

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