Virgin Media Says Ofcom’s Rural Broadband Price Cut Won’t Help

Virgin Media has warned that Ofcom’s decision to cut the wholesale price that BT charges in rural areas will not resolve the long term problem of rural broadband access.

Yesterday Ofcom announced its decision to “significantly reduce the prices” that BT Wholesale can charge ISPs, where BT is the only provider of a wholesale broadband service (i.e. in rural telephone exchanges).

Ofcom said the price reduction will be 12 percent below inflation per year and will apply to services provided using BT’s wholesale broadband network.

Fujitsu Alternative?

However Virgin Media was quick to point out this did little to resolve the underlying problem of rural broadband.

“It’s encouraging that these conclusions recognise the growing demand for bandwidth, as more gadgets and devices attempt to connect to the internet, wherever consumers are,” a Virgin Media spokesperson told eWEEK Europe UK via email.

“However, these changes, which apply to areas of the country where BT is the sole infrastructure owner, are not the long term solution to the inherent problems of broadband in these rural areas,” the spokesperson added.

“Here we need more than just patching up the ageing existing network, but a game-changing alternative, such as Fujitsu’s proposal to invest in a new future-proofed fibre optic service which would be open to all,” said the Virgin Media spokesperson.

In April Fujitsu revealed that it is seeking government money to create a fibre network for rural areas. Both Virgin Media and TalkTalk have already pledged to offer services on it if Fujitsu’s bid is successful.

Ducting Clash

This could be because both Virgin Media and TalkTalk are currently clashing with BT over its charges for access to its telegraph poles and ducting.

In April a number of BT’s competitors wrote to communications minister Ed Vaizey, warning of a possible boycott of the government’s £830m investment in rural broadband pilots.

Their complaints centre around the prices that BT charges in order to allow them to access its telegraph poles and ducting.

In May Ofcom warned it may have to step in and regulate the ducting prices.

Virgin Media 100Mbps

Of course it is worth pointing out here that Virgin Media tends to install its own network in urban areas, and mostly ignores rural regions.

And Virgin Media recently announced that its ultrafast 100Mbps broadband service now reaches a quarter (25 percent) of all UK homes. It said that 6.5 million homes in the UK in 160 locations can now get this ultrafast service and also announced that it is on track to complete the remainder of its unique fibre optic network covering nearly 13 million homes by mid-2012.

As well as upgrading its network to enable its 100Mbps service, Virgin Media has also been upgrading customers’ upload speeds across the country for free. The ‘faster uploads’ roll-out has already reached ninety percent of Virgin Media’s network, giving customers up to 10Mbps upload with the 100Mbps service.

“Virgin Media has consistently led the greatest developments in broadband in the UK and we’re proud to continue this tradition with the roll-out of our 100Mbps service,” said Jon James, executive director of broadband at Virgin Media. “But we’re not stopping there – we continue to develop broadband technology with trials for 200Mbps taking place across the country and we have deployed a cutting-edge 1.5Gbps cable broadband trial in East London. Only Virgin Media has the network to drive forward the UK’s digital economy, giving Brits a true world-class digital entertainment service at their fingertips.”

BT did not respond to eWEEK Europe UK at the time of writing.