Virgin Media warns of slower pace to Project Lightning roll-out
Virgin Media is the latest broadband operator to publish its financial results and the take-up, product speed choice and roll-out are crucial for the UK broadband picture as they are and are likely to remain the largest competitor to the BT Group for many years.
The last quarters results to the end of 31st March 2017 saw Virgin Media as part of the Liberty Group add 82,000 broadband customers to give a total of 4,997,400 in the UK (if reading the results yourself you need to drill down to ensure you are looking at UK figures, rather than the combined UK and Ireland figures).
Issues with Project Lightning have been covered before in our news, but the results are warning that due to the management changes and review of the project we can expect the roll-out in 2017 to slow down. In the January to March roll-out some extra 102,000 premises were added or if you prefer 355,000 in the last 12 months.
The progress of Project Lightning is important as while a lot of the roll-out is in areas where superfast broadband is already available some of the areas are getting access to superfast broadband (and as this is Virgin Media ultrafast broadband) for the first time and thus is important with respect to how the UK is progressing towards the 95% goal and also reducing the numbers who will fall into the Universal Service Obligation safety net.
At the core of the marketing push by Virgin Media is its speeds being higher than its major competitors and the results phrase this even more starkly by saying "We extended our speed leadership in the U.K. with a new 100 Mbps entry-level tier and a new 300 Mbps top tier that offers ~4x higher speeds than alternative VDSL services". What is interesting is that while some people are running faster with Virgin Media than in the past the median speed has been largely flat since December 2014. The constant pushing ever faster speeds on the outside of the packaging also masks underlying issues that some see e.g. a connection speed that should support smooth 4K video streaming but services such as YouTube and others are constantly buffering, or gamers are finding their actual gaming is better on the much slower VDSL products which have a much more stable latency. Ironically the Virgin Media gamer package is sold as no traffic management and limits, when in reality it would benefit greatly from some form of traffic management for the actual gameplay traffic but this would likely break the Unlimited advertising rules and scare people aware whose experience of traffic management is being pushed into a naughty queue with even worse latency and slower speeds. The difference in the quality of service is apparent when we look at our quality metric figures, where just 11% of Virgin Media tests score the ideal 1, but 24% of BT Consumer customers do and on a small provider like AAISP this rises even higher to 44%.
The two profile graphs above show the speed tests that we saw in April 2017 for Virgin Media cable broadband customers when we exclude the mobile and tablet users. Excluding mobile devices which will clearly be using Wi-Fi gives around a 4 Mbps improvement in the result, highlighting two things handheld devices are the normal way to use their broadband for many and decent broadband hardware supplied by providers is critical to the consumer experience.