The Virgin Media cable network (a hybrid of fibre optics and co-ax cable) has been fairly stagnant in terms of coverage for a few years due to the costs of connecting new areas to the network. It appears Virgin Media is working with Vtesse Networks on a Fibre To The Cabinet (FTTC) arrangement to deliver VDSL2 as a way of offering quad play (phone/TV/broadband/mobile) services to areas currently outside its cable network.
Two areas are initially being targeted will be Higher Pill in Saltash and Hatt, with the trial starting in the Winter of 2009. The service is intended to provide speeds of up to 50Mbps and support HD IPTV. The CEO of Vtesse Networks also suggests that if the trials work well and the regulatory policy is supportive that the solution could prove feasible for covering as many as 2 million further homes in various 'not-spots' around the country.
A FTTC architecture is similar to what BT Openreach is progressing with, and should be covering 40% of UK homes by 2012. Virgin Media seems keen to promote the 50Meg speed, which matches their current fastest cable broadband product, and is also higher than the 40Meg Openreach talks about, but the technology is basically the same, so VDSL2 from Virgin Media is not likely to connect faster than VDSL2 from Openreach, as the fibre to copper handover point will result in the same length of copper phone line for both solutions. The difference is possibly down to expectation management. Since VDSL2 speeds do fall off as the distance from the cabinet to home increases, not everyone will see the 40Meg or 50Meg headline connection speeds.
Sub loop unbundling (SLLU) was looked at by Sky but rejected after a small trial, so it will be interesting to see how it pans out for Virgin Media. The regulatory comments suggest the price point may be marginal, and a favourable change in pricing is desired. The trials now may be a way of ensuring Virgin Media has a tried and tested solution ready for when funds from the 50p broadband levy start to become available. They could also be steps to resolve the not and slow-spot issues to ensure areas meet the proposed 2Meg Universal Service Commitment.
When Virgin Media arose from the ashes of ntl:Telewest TV services, the areas outside cable network area where talked about, but two and half years later nothing has yet to materialise.
One possibility if the price from Openreach is right, is that Virgin Media could piggy back onto the Openreach FTTC services. This would open up the competition for products like BT Vision, which one presumes BT Retail have big plans for once they can improve the bit rates used for the TV streams. Also if the talk of delivery of Sky Anytime content delivery over broadband is true, then we may see Video on Demand becoming a driver for Next Generation Broadband in the UK, like it has in many other countries. The key for Video on Demand is that it has to achieve DVD or better quality at the same price as postal DVD rental services, but avoid the slow delivery time of the old postal system.