Virgin Media broadband blow to BT

Virgin Media is set to extend its super-fast broadband network by using infrastructure owned by BT, in a move that will underline the escalating battle between the two internet access providers.

Virgin, the UK’s third-biggest broadband provider, is interested in providing high-speed internet access by running fibre optic cables along BT’s telegraph poles so as to reach homes.

Such arrangements could help Virgin to expand its network coverage to as many as 16m of the UK’s 26m homes.

Ofcom, the telecoms regulator, on Thursday unveiled plans to require BT to let rivals gain access to its telegraph poles, so as to string fibre cables between them.

Ofcom also said BT should let rivals have access to its underground ducts, so that they can run fibre cables through the tunnels.

The duct and pole proposals by the regulator would enable BT’s rivals to reduce the substantial cost of building high-speed broadband networks to homes, because they would not have to dig up roads to lay fibre cables.

Ed Richards, Ofcom chief executive, said its proposals struck a balance between promoting competition and investment in super-fast broadband services.

Virgin asked BT for access to its ducts and poles this year, but the two companies were unable to reach an agreement.

Virgin therefore welcomed Ofcom’s plans to require BT to let rivals have access to its ducts and poles, saying: “This is an important step that rightly focuses on opening up areas of the country not already served by super-fast broadband, removing one of the hurdles that make such developments near impossible at present.”

Virgin’s high-speed network covers 12.7m homes, mainly in towns and cities. The cable television operator is planning to run the network past another 400,000 homes by the end of 2012. It is also considering extending the network further by running fibre cables over telegraph poles, notably in some rural areas.

Ian Watt, analyst at Enders Analysis, said: “We expect Virgin Media to expand its existing network footprint to about 15.5m households.”

BT, the UK’s largest internet access provider, is building a super-fast broadband network that will cover 4m homes by the end of this year, and 17m by 2015.

It welcomed how Ofcom had concluded it should not impose price controls on its wholesale high-speed broadband products.

TalkTalk, Britain’s second-largest broadband provider, is planning to use BT’s wholesale products. Some analysts say TalkTalk lacks the resources to build its own fibre network in the short term.