Virgin Media are to cater to their five million customer’s demands for top speed broadband, and have announced they are to invest £3bn in improving their fibre optic broadband network, increasing the network’s reach from 13 million to 17 million homes.
It is one of the biggest investments in broadband infrastructure in the UK for over a decade.
Virgin Chief executive Tom Mockridge said “the investment is essential to economic performance and would naturally create 6000 new jobs including 1000 apprenticeships and also stimulate UK economy by £8bn”. The company is in the process of expanding its network to 110,000 homes across East London, Glasgow, Sunderland and Teesside.
However, the money will be spent on filling in gaps in its lucrative existing network rather than widening the network to remote rural areas to bring high-speed services, which critics say has long been neglected by communications companies such as Virgin and BT as it may not be economically profitable for them. If the leading Topspeed broadband providers should invest more in infrastructure and networks or else we will be left behind as the world technology is moving forward at high speed.
BT – aided by public funds, mainly money set aside from the TV licence fee, is preparing to take over EE and become the dominant player in fixed and mobile broadband, may quietly welcome today’s announcement.
A stronger Virgin Media network may make regulators less inclined to worry about its dominance. BT should do more to invest in improving existing infrastructure to help speed up internet services in the countryside.
The investment comes as Virgin Media announced a 2.3% increase in total revenues to £4.214bn for the year to the end of December compared with a year earlier.
Virgin said the increase in revenue was largely the result of increased cable subscription revenue, which grew 3% last year.