Virgin Media turning around?
Virgin Media is still bumping along its rocky road, with Citigroup forecasting a decline of about 31,000 customers in the third quarter. While this does not sound good it is an improvement on the second quarter when 70,000 left. Gazing into the crystal ball the estimate is that Virgin Media may gain around 45,000 customers in the fourth quarter. Visit The Times for more detail.
"We are bandwidth constrained. We have enhanced head ends for HD channels. But the main focus with HD is [video on demand] and it's our belief there is an appetite for HD film. However, we hope to add HD channels on a selective basis."Malcolm Wall (CEO, Content), Virgin Media
The question is if they are constrained for bandwidth to provide HD content, are they also constrained with respect to broadband capacity? If the answer is yes, then launching a 50Mbps broadband service may be a folly too far if it results in more congestion or heavier traffic management than is currently in place.
If what seems to be a growing reputation for poor broadband performance continues at Virgin Media, and sign-ups to their premium 20Mbps and 50Mbps services do not take up, it could be bad news for the state of broadband nationally. Why? Simply put investors looking to see if the market is ready to pay a premium for significantly faster broadband may be put off by what seems to be low levels of interest. Investment in true next generation broadband that pushes fibre closer to the consumer is a chicken and egg situation; investors looking for demand to make the investment worthwhile and early adopters waiting for a service to appear that meets their needs.