Virgin Media adds 32,000 customers across UK and Ireland
We looked at the popularity of the various product tiers for the major UK broadband providers back in April and with Virgin Media now publishing its Q1 2018 results it is time to see how close or not our analysis from Q1 was and the answer is that Virgin Media are declaring 73% of cable customers on a 100 Mbps or higher tier across which compares to the 80% we estimated from speed test results.
Virgin Media which is owned by Liberty Global reports combined figures for UK and Ireland so we don't know what the split is for the 32,000 new broadband customers in Q1, but we do know that the Project Lightning roll-out added 111,000 premises in the quarter in the UK and the expansion project has now made it past 1.2 million premises. As a rough and ready sanity check, compared to three years there has been a 1.8 million increase in the number of premises where Virgin Media cable services are available in our broadband coverage tracking, the reason our figure is higher is down to improvements made in our premises counting, but it does show that we are seeing coverage increases in line with what Virgin Media are reporting.
The results mention the launch of the 350 Mbps service in March which with the 15% over provisioning will produce speed test results of around 384 Mbps down and 20 Mbps up which currently trumps the G.fast speeds Openreach offer but its popularity could suffer if G.fast and FTTP provide the low and stable latency that gamers love while also satisfying the ability to get massive game downloads in less time than it takes to make a coffee. What is interesting is that the Super Hub 3 is still considered best in class with a 57% take-up celebrated in the results, things for Hub 3 owners should have improved with the recent Intel Puma bug fixes but it may take for this to be reflected as failures tend to endure longer than successes.
Looking to the future no announcements have been made about DOCSIS 3.1 in the financial results, while in Germany this has started. DOCSIS 3.1 is important as in addition to the headline options of Gigabit connectivity which many claim are only possible with full fibre it should also offer more channel capacity to help mitigate local congestion issues. It may be that in the UK a game of chicken is being played out, with Virgin Media waiting to see what the retail price will be of the first full fibre Gigabit service that passes one million premises will be selling at and will use a big brash DOCSIS 3.1 launch and promotion to retain customers, but if as we suspect the Vodafone Gigabit service is going to be aggressively priced at £30 or less a month where the two services overlap it may prove tough to hang onto customers.