OK, first of all – a bit of history. Virgin Media and O2 are currently awaiting regulatory approval to merge into a single new company. The deal was proposed back in May 2020 by parent companies Liberty Global and Telefonica, but has not yet received an official thumbs up from the Competition and Markets Authority (CMA). Should the deal be approved in the next few weeks – as Virgin Media and O2 believe is likely – incumbents such as BT, Plusnet, EE and others could face an onslaught of new competition. And it could see that Sky customers are enjoying the 1,000 Mbps speed previously reserved for Virgin Media customers.
This is because the newly merged Virgin Media-O2 will establish itself as a competitor to Openreach and enable third-party companies to use its broadband infrastructure. For those unfamiliar with Openreach, Openreach, a subsidiary of BT, manages a large chunk of the UK’s landline and broadband infrastructure, including internet packages from BT, Sky, EE, TalkTalk, Plusnet, Shell Energy, Vodafone, Post and more.
It is true that there are some broadband startups that use their own full fiber cables to offer breathtaking speeds, such as HyperOptic, Community Fiber, GigaNet and more. However, these remain quite localized. While some are expanding rapidly, they don’t offer nearly the same footprint as BT, Sky, and TalkTalk.
While broadband companies with the greatest coverage are able to compete on prices, packages, and freebies, they are unable to beat each other in terms of speed because they all rely on the same cables from Openreach. And here Virgin Media-O2 would like to offer something new.
Openreach currently has around 4.5 million rooms connected to its next-generation gigabit-enabled fiber optic broadband. By comparison, Virgin Media is well on its way to connecting 15 million households by the end of this year. Following the appointment of a CEO for the new joint venture Virgin Media-O2, a super-fast broadband connection was also promised to an additional million premises before Christmas 2021, bringing the total to 16 million households.
BT, Sky and Virgin Media customers now receive MORE compensation
And now we have our first indication that those 16 million households may soon be able to buy their broadband plans from other companies, including established brands like Sky and TalkTalk, as well as brand new companies, rather than just Virgin Media. A new request to regulator Ofcom for Code Powers from Liberty Property Co II Limited, a subsidiary of Liberty Global – the parent company of Virgin Media Broadband and Television in the UK – shows this from the brilliant team at internet-obsessed blog ISPreview It intends to “the wholesale products from Virgin Media ”to facilitate“ building and operating a broadband network ”across the UK.
Ofcom intends to consult this new request by May 10, 2021.
Should the proposal give the go-ahead, the chess pieces for Virgin Media-O2 seem to unite to really challenge Openreach. More competition should be a good thing for customers. If new broadband providers are able to take advantage of the full fiber cables already buried under roads across the UK, they will be able to scale much faster.
Some tipsters suggest that Sky will be one of the first partners to use Virgin Media’s super-fast network. The company has already announced ambitions to offer its Sky Q television package over a broadband connection. So you don’t have to drill a satellite dish outside of your home to adjust to the selection of paid channels, films and sports equipment. However, those plans have fallen silent since it was first announced in 2017.
With millions of households connected to gigabit broadband (that’s roughly 15 times faster than the average home broadband connection in the UK), Sky could potentially soon realize its four-year-old plan.
The British government had promised to provide gigabit broadband connections across the country in the last general election by 2025. However, that promise was silently watered down by Prime Minister Boris Johnson last year. Confirmed in the national infrastructure strategy, the government supports its commitment within the next five years from 100 percent of the apartments to 85 percent of the premises.
Gigabit-enabled connections offer speeds of up to 1,000 Mbps.Since Netflix only recommends 5 Mbps for high definition streaming and 25 Mbps for 4K quality videos, these future-proof broadband connections are more than enough to get you from Working from home, holding video conferences, solving box set problems at the weekend, catching up on live broadcasts and downloading updates on smartphones and games on next-generation video game consoles and uploading backups.
Glacier internet speeds at home remain an issue – something that the demands to work from home and stay indoors during national lockdowns have brought relief. According to a study published by Cable.co.uk in September 2020, the UK ranks 47th in downloads with an average speed of 37.82 Mbps. At this speed, downloading a movie in high definition (HD) should take approximately 15 minutes.
The UK manages to outperform 174 other countries worldwide but is way behind 46 other nations in the Speed League, including 21 in Western Europe. This makes the UK one of the slowest in Europe when it comes to average broadband speeds. To make matters worse, the UK has lost ground since the 2019 measurements.
Dan Howdle, Consumer Telecom Analyst at Cable.co.uk said: “While around 60% of the UK has access to the Virgin Media network and can reach speeds of up to 516 Mbps, the availability of smaller networks like Hyperoptic is limited at gigabit speeds, the Openreach- Network remains the anchor that keeps UK average speeds comparatively low. Entry-level fiber packages and “fast” fiber packages at Openreach have been fixed at around 30-35 Mbit / s and 60-70 Mbit / s, respectively, for more than five years In addition, significant changes were made to how these speeds are advertised.
“As the dominance of smaller countries and regions at the top of the table shows – Liechtenstein, Jersey, Andorra, Gibraltar – it is obviously much easier to convert a country or area to full fiber, the smaller it is. However, the UK is still far behind many nations of equal or larger size. Ultimately, the UK, especially Openreach, is comparatively late in adopting fiber-only networks, causing the UK to stagnate while other nations are gaining ground. “
The recent plans of the Virgin Media-O2 joint venture and the rapid expansion of its full fiber network could of course change this. Find out Read our in-depth analysis to see what the merger could mean for existing Virgin Media and O2 customers.