No chance of a FiOS-like UK option, says Virgin Media CEO
Although Verizon's broadband FiOS service might be helping to tank the subscribership of US cable provider Broadcom, Virgin Media's CEO believes that kind of slam-dunk isn't exactly about to happen on the other side of the Atlantic.
NEW YORK CITY (BetaNews) - "There is no threat in the UK of fiber to the home," insisted Neil Berkett, CEO of Virgin Media, one of the biggest cable providers in the UK and an offshot of Sir Richard Branson's Virgin financial empire. Berkett spoke yesterday at the UBS Media & Communications Conference in New York City.
Earlier in the day, at the same conference, Comcast chief Michael Angelakis had pointed to Verizon -- a company that's now extending fiber to the home through FiOS -- as Comcast's chief competition.
As for Virgin Media's Berkett, he characterized this week's bad news around Broadcom as "sad for Comcast." The CEO also acknowledged that there might be some "washover effect" on other cable service providers in the US and elsewhere.
But the CEO indicated that, in fighting "churn" -- or loss of subscribers -- in its own UK base, Virgin Media will compete not with fiber services from telco companies, but with services from digital content specialists and other broadband network providers.
Although British Telecom (BT) does offer ADSL, the UK telco's services only bring fiber "close to the home," according to Berkett.
Meanwhile, although Virgin Media does provide some contract mobile services, broadband technology is its major -- or "hero" -- technology, he said.
Unlike Verizon, which is making a "quad-play" by combining wireless with broadband offerings, though more along the lines of Broadcom, with its "triple-play" orientation, Virgin plans to stick mainly with delivery of voice, data, and video content over cable.
"We are the next generation access solution for the UK. A key strategy for us going forward will be triple-play penetration," Berkett said. "This is not just about speed. Also, content will be wrapped around that."
Burkett admitted that, Virgin Media's huge installed market in both broadband and pay TV, churn and "bad debt" are both real problems for the company at the moment.
Although he didn't specify the causes of the churn, or where the lost subscribers are going, Burkett acknowledged a couple of specific obstacles the cable provider has faced over the past year or so.
For one thing, he said, Virgin Media has now stopped using video content from Sky Basics, the News Corp. programming venture which provides Sky News and Sports. During questioning from analysts, he said the decision is due to a dispute involving content pricing.
"It's not the right price," he said. "I believe we took the right approach."
Berkett said that Virgin Media is also mapping plans for an ultra high speed cable broadband offering running at 50 megabits-per-second (Mbps), adding a third tier to its existing 10 Mbps offering and recently introduced 20 Mbps service.
Another analyst asked Berkett for his response to complaints from some UK users that Virgin Media -- previously known among gamers and other users for its high-speed access -- has "slowed (down) in some areas."
According to the Virgin Media exec, the problem boils down to users' PCs, not to those of the broadband network.
"The vast majority of users' PCs are not able to get 20 Mbps," he replied. Berkett added that Virgin Media has reacted by launching an "educational campaign" among UK customers.
Berkett acknowledged, too, that Virgin Media was "late to notice" DVR. But, he added, the UK cable company is trying to capitalize, in a way, on this mistake, by coming out with high def DVR as its first ever DVR offering.
"Our churn is going down. Our growth is going up. Our bad debt is going down," according to Berkett.