Virgin Media to offer its broadband network wholesale

Virgin Media plan to move its fixed broadband network assets to a new subsidiary company, allowing the provider to offer wholesale services.

The provider says the move will "reinforce our position as the leading challenger to Openreach", creating more choice for other broadband providers to resell services on their network.

Nexfibre, the wholesale fibre network set up by the parent companies of Virgin Media O2 will remain separate, so the new 'NetCo' will cover around 16 million premises.

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Virgin Media wholesale

The plan for Virgin Media to offer access to its network on a wholesale basis to other broadband providers creates a direct competitor to Openreach.

The new company will resell Virgin Media's existing cable network of 16 million premises, while also prioritising the upgrade of the entire network to full fibre to the home, due to complete by 2028.

There are no details on the wholesale packages that will be offered to other providers however, although it's unlikely Virgin Media will want to create direct competitors to their retail business.

The most obvious way they could achieve that, of course, is to maintain their TV services separately, including Stream, as well as the benefits offered with Volt bundles through O2, with the provider already making clear mobile assets won't be transferred to the new NetCo.

Market changes

A wholesale network based on Virgin Media's existing reach of 16 million premises will for the first time create a new operator with 'Significant Market Power'.

This will prove to be an interesting change to the broadband market in the UK, with Ofcom previously only ruling BT had to share access to their duct and pole infrastructure with other network operators.

While Ofcom previously ruled Virgin Media didn't have to share its ducts, back in 2011, the move to open up its network on a wholesale basis could change that.

The ability for new fibre networks to utilise Openreach's existing infrastructure has opened up the broadband market and undoubtedly helped to drive the full fibre rollout.

However, Virgin Media also make clear the new NetCo will be positioned to acquire altnets, helping to consolidate the market of fragmented smaller fibre networks.

The NetCo will also create competition for CityFibre, a dedicated wholesale full fibre network with plans to reach 8 million premises by the end of 2025.

CityFibre have also shown signs of clear interest in acquisition of smaller altnets, with Greg Mesch, chief executive of CityFibre saying the company has plans to acquire five altnets in the next 24 months, with a further six under non-disclosure agreements.

Mesch said, "Investment is drying up but I think that's creating the opportunity to consolidate the network".

Faster broadband

Virgin Media's ambition to expand and upgrade their network is also helping to drive faster broadband, launching their first multi-gig package Gig2 this month, as well as creating an optional add-on for customers to pay for symmetrical upload speeds on their full fibre network.

With a new dedicated wholesale network powering Virgin Media's existing network upgrade, it's likely customers will soon have more exciting choices for multi-gig broadband speeds, as well as increased choice of provider for those packages too.

Offering symmetrical uploads where new XGS-PON technology has been made available also helps to put Virgin Media on a par with other full fibre networks, such as Hyperoptic and Community Fibre, as well as CityFibre, who also offer symmetrical upload speeds.

For now, most customers served by Virgin Media will be limited to their Gig1 plan as the fastest option, but the recent announcement from the provider suggests the future broadband market will remain competitive despite the high chances of consolidation.