July 15, 2009

Virgin Media Cuts Broadband Prices

U.K. cable provider Virgin Media has announced price reductions for its next-generation broadband services in response to the recession. The price of its flagship 50 Mbps broadband service, which includes a phone line, will be reduced from GBP 46 to GBP 39 effective September 1.

Richard Thurston, analyst at Analysys Mason, said in a prepared statement: “Virgin’s fastest broadband offering is priced at little more than conventional broadband services. For example, BT’s comparable high-end offering costs GBP 35.71. Furthermore, Virgin’s plans to bundle a netbook with its next-generation broadband offerings looks set to attract additional customers, just as it did for mobile operators."

“The percentage of subscribers who have adopted (Virgin's) 50 Mbps service is well down in the single digits," continued Thurston. "It has also had great problems with upload speeds, which have remained sluggish to put it mildly…. BT is racing to roll out fibre-based broadband services that will offer comparable access speeds. The incumbent is late to the market with these services, but when they arrive, they will give Virgin a run for its money.”

(For a Q&A with Virgin's director of technical strategy, click here).