Broadband the "hero" for Virgin Media

 

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Posted on 1 Nov 2007 at 08:41

Cable operator Virgin Media cannot compete with rival BSkyB in the premium TV market and is instead launching a trial of superfast broadband speeds to attract customers, its acting chief executive Neil Berkett claims.

Berkett, appointed acting CEO in August when Steve Burch resigned, says Virgin will promote its broadband as its "hero" product after becoming bogged down in a damaging and high-profile TV channel dispute with BSkyB earlier this year.

"I think particularly in the premium TV space it has become more difficult for us to compete with Sky," he claims. "My position, with the board's mandate, is to concentrate more on our broadband products."

Ofcom has launched an investigation into the pay TV industry after BSkyB's rivals, including Virgin Media, accused it of trying to suppress competition.

In broadband, however, Berkett claims Virgin is better placed to compete as it already offers speeds of up to 20 Mb/sec to some customers and has successfully trialled 50 Mb/sec with a view to offering content such as high-definition programming on demand.

He said the competition within the broadband market from the likes of Carphone Warehouse, BT and BSkyB had turned broadband access into a commodity in Britain. BSkyB currently offers broadband speeds of up to 16 Mb/sec while BT offers 8Mb/sec but has plans to roll out 24 Mb/sec with its new 21CN network next year.

Virgin Media was launched earlier this year from the merger of NTL, Telewest and Virgin's mobile phone division. But its launch was overshadowed by the spat with BSkyB over how much each side should pay the other to carry their TV channels.

Sky pulled its basic channels, which carry popular shows such as Lost and 24, off the cable platform after the two sides failed to reach an agreement. The case is currently going through court.

Virgin lost up to 40,000 customers over the dispute and Berkett said he would love to have the Sky channels back.

The cable group also appears to have cut back on its public comments regarding Sky since Berkett took over, but he declined to say whether the change in leadership would result in easier negotiations between the two sides.

Author: Reuters