Virgin Media has today announced that 4 million of its customers will have their broadband speeds doubled, at no extra charge, starting February 2012.
The company will now be offering a maximum of 120MB per second, the UKs fastest retail broadband. Its 10Mb, 30Mb and 50Mb services will all be doubled, and 20Mb customers tripled to 60Mb. 100Mb customers will be upgraded slightly to 120Mb.
"The last few quarters have demonstrated that, with the proliferation of exciting new digital services, demand for superfast connectivity among UK households is accelerating fast. Virgin Media’s long history of investment in next generation digital infrastructure means we have – and will continue to have – the ability to meet this demand by putting more bandwidth in the hands of consumers at a fraction of the cost of other network operators," Virgin Media CEO Neil Berkett.
By comparison, the average UK broadband speed is 6.2Mbps, according to Ofcom.
Virgin Media says the upgrade programme will take 18 months, with completion due in mid-2013.
"Once the 18 month programme is complete, it means that around a quarter of Virgin Media customers will be meeting the basic speed requirement of 30 Meg which is an EU target for 2020, many years ahead of time. Thus the news is good for UK broadband as a whole and should highlight that the UK is not the internet backwater sometimes it is portrayed as," said Andrew Ferguson of broadband price comparison website Thinkbroadband.com.
"Most important for consumers the upgrades are free, and with investment in the core network will ensure that families can all be online at the same time, watching video on demand from the wide variety of sources now available in the UK, and with the improved upload speeds the ability to generate content and be an active part of the Internet increases."
The company will invest £110m across 2012, primarily funded from the sale its 50% share of UKTV (which earned the company £350m). The company is not using debt funding to finance the venture. The money will largely be spent on new enhanced modems (capable of 400MB speeds) alongside upgrades of the company’s fibre network and hub-sites. It will also begin a big marketing campaign to push the new products.
"The roll-out of this initiative means we will offer more value for both existing and potential customers. In both the short and medium term, we anticipate that it will provide a compelling return on a relatively modest incremental investment," Beckett said.
The company will present its final earnings for the 2011 financial year on February 8. The company will also be providing a strategy update, with further detail on its TiVO service and partnership with the BBC.
