Ovum: Good and bad at Virgin Media broadband update event

Feb. 9, 2009
9 FEBRUARY 2009 -- An Ovum analyst reports that Virgin Media's message was positive, but that there are two shortcomings in its strategy that will affect the company in the long term.

9 FEBRUARY 2009 -- Virgin Media (VM; search Lightwave for Virgin) held an analyst event 5 February to provide an update on its 'ultrafast' broadband (DOCSIS 3.0) deployment and discuss future strategy. Michael Philpott, principal analyst at market consultancy Ovum (search Lightwave for Ovum), attended the event and reported in a note that on the whole the message was positive, stating, "It was clear that consumers were starting to see the benefits of the DOCSIS 3.0 upgrade." However, Philpott added that the event also revealed two shortcomings that in his view will affect the company in the long term. He also found details of VM's overall strategy "sketchy."

VM's advantages
Philpott said that VM was right to point out that its current network already provides the UK with a next-generation access (NGA) infrastructure. It is newer than BT's network; it has a fibre to the cabinet (FTTC) approach; customers are, on average, less than 1 km from the exchange; and the last mile consists of a twisted copper pair and coaxial cable. "In essence, it already has what BT is planning to spend £1.5 billion on just to cover around 40% of UK households," Philpott asserted.

DOCSIS benefits
Philpott also pointed out that, as with all cable networks, VM's network was built to deliver broadcast TV rather than broadband. Because of this the final mile is a shared architecture -- typically serving up to 1,000 households per node. These households currently have to share 2�38-Mbps channels. While not all 1,000 households will be broadband customers and not all customers will be online at any one time, sharing bandwidth can affect the quality of the broadband service as bandwidth demand increases, he said.

DOCSIS 3.0 introduces four new channels of 52 Mbps each, thereby increasing the potential downstream bandwidth by 208 Mbps. This will enable VM to offer higher-speed services (VM recently launched a 50-Mbps service) as well as alleviate the sharing problem, in Philpott's view. He adds that VM aims to migrate all of its existing 20-Mbps customers as well as the new 50-Mbps customers to the new channels; this will not only benefit these high-end customers but low-end customers as space in the old channels is freed. The migration will enable VM customers to enjoy not only higher speeds but also improved throughput. As DOCSIS 3.0 channels can also be bonded, future potential bandwidth levels could theoretically reach 200 Mbps, Philpott added.

Significant limitations still exist
Two major issues still exist with VM's network, Philpott believes. First, the network only covers about 50% of UK households, which limits the potential customer base and to some extent the services it can offer.

The second issue is upstream bandwidth, which DOCSIS 3.0 does little to improve. The current upstream bandwidth on the 50 Mbps service is 1.5 Mbps. VM claims that in the near future this could increase to 5 Mbps. Philpott reports that upstream bandwidth currently isn't a major issue in VM's opinion. However, Philpott believes more consumer applications will require data to be uploaded as well as downloaded, and this trend will only accelerate over time. Demand for upstream speed will therefore have to be addressed in the longer term.

More than network convergence is needed
VM started the presentation by stating that its aim was to simplify the 'digital world', Philpott reported. Along these lines, VM intends to launch a new home gateway, the 'V Player', that will integrate the broadband and TV networks and connect various CPE. "However, to truly simplify the digital home will require more than just connecting devices", Philpott wrote. Ovum will need more detail from VM on its strategy before it is able to say whether the carrier has found a compelling approach, he concluded.

Visit Ovum

Visit Virgin Media

Sponsored Recommendations

March 12, 2025
Join us for an engaging discussion with industry experts on the intersection of AI and optics. Moderated by Sean Buckley, editor-in-chief of Lightwave+BTR, this panel will explore...
March 25, 2025
Explore how government initiatives and industry innovations are transforming rural broadband deployments, overcoming cost and logistical challenges to connect underserved areas...
March 7, 2025
In today’s hyperconnected world, rolling out and managing profitable, high-performance networks for access and transport will require innovative architectural approaches. The ...
Sept. 30, 2024
Join us for an interactive roundtable webinar highlighting the results of an Endeavor Business Media survey to identify how optical technologies can support AI workflows by balancing...