Virgin Media O2, the joint venture between Liberty Global and Telefonica that supplies broadband and mobile services in the UK, announced yesterday during its review of second quarter 2021 results that it plans to switch to an all-fiber network approach. While the current gigabit upgrade of its DOCSIS 3.1 HFC infrastructure will continue to its expected completion this year, the company says it plans to overbuild “the vast majority” of its infrastructure with fiber to the premises (FTTP) by 2028.
The service provider acknowledges that it will be more expensive to field FTTP than upgrade to DOCSIS 4.0; the former likely will cost approximately £100 ($40) per premises passed versus approximately £60 ($84) per premises for a DOCSIS 4.0 upgrade. The figures do not include customer installation costs as well. However, Virgin Media O2 expects to make up the difference, at least partially, in lower operational expenses.
“The value accretive decision, backed by Virgin Media O2’s shareholders, has been taken following recent deployment trials, a thorough analysis of alternative network scenarios, and the potential opportunity to enter the fixed wholesale market. The investment will also fuel future connectivity innovation for consumers and businesses,” the company said in a press release.
Virgin Media O2 already has an FTTP network that passes 1.2 million premises. The scale of the upgrade would rival that of BT/Openreach, which also offers wholesale fiber access to competitive carriers.
"The merger between Liberty Global's Virgin Media and Telefonica's O2 took place earlier this year. “Virgin Media O2 is off to a flying start," commented Lutz Schüler, CEO of Virgin Media O2. "We’ve maintained the strong momentum of recent quarters and are one of the largest and fastest growing converged providers. Our mission is to upgrade the UK, and we are doing exactly that. Today we’ve announced a major new fiber upgrade program which will see us begin the next evolution of our network, building on the investment, firepower and leadership we already have and ensuring we’re fiber fit for the future. In 60 days, we have achieved a lot, but this is just the beginning. With strong foundations for growth in place, we will boost connectivity, provide greater choice and be a challenger the country can count on.”