Virgin Media: The Gloves are Off
The first thirty seconds of the hour long Virgin Media launch (NASDAQ: VMED) was basically slagging off the competition:
The only interesting disclosure in the launch was the plan for off-net services (ie via BT’s local loop) to also deliver the quad play to 97% of the UK population by November 2007. This is basically rubbish and I’ll eat my hat if Virgin Media manage to accomplish this. Yes, they might deliver an uneconomic Video-on-Demand/Broadband/Voice service as a BT reseller, but there is no way they can build out economically a LLU infrastructure to 97% of the UK which will be around 4-5k exchanges. There is also no way they can deliver usable IPTV to 97% of the UK. ie Mission Impossible.
However, I do think Virgin Media will manage to generate a lot of noise about the excessive power of BSkyB in the corridors of power, whether the government will do anything about it is a completely different matter. I suspect that OFCOM in the next twelve months will be under a mega amount of pressure as they are caught in the crossfire to referee a UK communications market which will rapidly descend into a state of anarchy in the home market. The stakes for both Virgin Media and BSkyB have become too high. I'm can't wait for the online calculator to appear comparing the damage that the Virgin empire causes to the planet compared to the carbon neutral utopia of BSkyB.
BT can probably avoid serious damage because of its wholesale business and reputation for quality. All the rest of players in broadband market are going to really feel some hard core pain – this includes Orange, Tiscali and Carphone Warehouse. Personally, if I was Vodafone, O2 or T-Mobile I would stay well clear of the home market in terms of fixed line provision of voice and video, because the temperature is about to rise to boiling point.
- “Talk, Talk Hot Air”
- “Satellite Pictures shaking with Wind and Air”
- “Orange: Dolphin, Canary, Panther, Barking…”
- “See, Speak, Surf – Slow, Stuck, Suffer”
“A competitor who systemically suppresses anyone who wishes to compete in content needs to dealt with”.Basically he is picking a fight with Sky and the Murdochs, Jim also paraphrased James Murdoch and the insulting comments about Virgin Media with the “nothing changes by getting handed a company from your father and pretending to have a new company”. Ouch – this fight has now become completely personalized – young turk prove you are worthy of your fathers reputation!
The only interesting disclosure in the launch was the plan for off-net services (ie via BT’s local loop) to also deliver the quad play to 97% of the UK population by November 2007. This is basically rubbish and I’ll eat my hat if Virgin Media manage to accomplish this. Yes, they might deliver an uneconomic Video-on-Demand/Broadband/Voice service as a BT reseller, but there is no way they can build out economically a LLU infrastructure to 97% of the UK which will be around 4-5k exchanges. There is also no way they can deliver usable IPTV to 97% of the UK. ie Mission Impossible.
However, I do think Virgin Media will manage to generate a lot of noise about the excessive power of BSkyB in the corridors of power, whether the government will do anything about it is a completely different matter. I suspect that OFCOM in the next twelve months will be under a mega amount of pressure as they are caught in the crossfire to referee a UK communications market which will rapidly descend into a state of anarchy in the home market. The stakes for both Virgin Media and BSkyB have become too high. I'm can't wait for the online calculator to appear comparing the damage that the Virgin empire causes to the planet compared to the carbon neutral utopia of BSkyB.
BT can probably avoid serious damage because of its wholesale business and reputation for quality. All the rest of players in broadband market are going to really feel some hard core pain – this includes Orange, Tiscali and Carphone Warehouse. Personally, if I was Vodafone, O2 or T-Mobile I would stay well clear of the home market in terms of fixed line provision of voice and video, because the temperature is about to rise to boiling point.
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