Virgin Media’s £3 billion (€4 billion) Project Lightning broadband investment programme will extend the company’s reach to two thirds of UK homes and generate up to £1 billion in incremental revenue by 2020, according to parent company Liberty Global’s president and CEO Mike Fries.
Fries, speaking on an analyst call after Liberty Global released its full-year results at the end of last week, said that the company believed Virgin Media could replicate its existing footprint rates of 40% penetration and £50 ARPU, based on its experience with field trials in Glasgow and Teeside, where expansion to 10,000 homes achieved penetration of 23% and ARPU of £48.
Fries said the build-out of Virgin Media’s network to new areas would be “demand led” based on its reception in various areas. While the headline price tag of £3 billion implies a cost of about £625 per home built out, Fries said the some of the investment would be variable based on take up, such as investment in consumer premise equipment. He said the company would launch with broadband speeds of 150Mbps.
Speaking on the same call, Virgin Media CEO Tom Mockridge said that the cost of building out infrastructure is much less than it was a few years ago, thanks to advances in technology. The network in new areas will be fibre-deep and will not include a copper overlay to deliver telephony services, as is the case with Virgin Media’s legacy network.
Mockridge said Virgin Media would look to build in cities where it already has a presence, filling in gaps in its network and taking customers from rival providers as well as growing penetration in areas where it is not already present.