The company has said it intends to make a return on its investment by renting the service out to rivals once its free service provision agreement expires after the 2012 London Olympics.
The company won the right to tender Wi-Fi services at London Underground stations ahead of rivals BT and O2. The financial terms of the agreement were not disclosed.
Virgin Media has been pursuing additional funding to assist in network maintenance, as well as further expansion. Pursuing rivals such as BT and O2 would mean that those companies could link the service to their own, providing a form of Wi-Fi roaming for customers – potentially extending the networks usefulness beyond the Underground.
The Financial Times is reporting that the company has already sent out proposals to its rivals, including Vodafone, O2, BT and Talk Talk, and has called for bids under a wholesale arrangement to be launched after September 2012.
Gartner Jessica Ekholm, Research Director and Agenda Manager for Consumer Services and Applications believes it’s a great opportunity for all the parties involved.
"Virgin Media will be able to offer a service that Londoners and tourists alike have been asking about for many years -access to web and emails in the Underground. By wholesaling Wi-Fi they will open up new revenue opportunities for themselves and open up the possibility for other providers to get a competitive edge and to take advantage of future network developments in the Underground."
It is worth remembering that the Wi-Fi service does not include coverage on the trains themselves, which the TfL has been considering for many years. The Paris Metro, for example, is in the process of offering this service.
The Virgin Media Business arm of the company is also now pursuing clients, according to Virgin Media Business’ Managing Director, Mark Heraghty.
"We’re speaking to a range of potential wholesale partners, including mobile operators, ISPs and other service providers, about our new Wi-Fi service on London Underground. Our next generation Wi-Fi is connecting the millions of Tube journeys made each day and we want to make Wi-Fi on London Underground widely available with a wholesale model combining the best consumer experience with real choice."
The emergence of Wi-Fi roaming technology, whereby mobile users can seamlessly move in and out of Wi-Fi hotspots, has become more of a reality in the last 12 months. Cisco recently announced new Hotspot 2.0 copmpatible updates to its hardware, which can produce this ‘handshake’ between Wi-Fi broadcasting devices. Other companies are following suit.
It has already been suggested that this could be a replacement ‘impromptu’ high speed mobile network to replace the UK’s long delayed 4G mobile network rollout.
