Open Access is good for the market

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During a post-COTS steering group discussion this week, one of the matters under discussion was Virgin Media's network and its closed status. The existence of a closed network within the UK at a time when many are pushing for open networks as we move to NGA is a problem. But is the problem for Virgin or for the rest of the country? This paper....

argues that open access networks are not only good for consumers and nation's economies, but also for operators. Although, it also states that more evidence and data is required to assess the situation fully.

Capacity utilisation is one issue which leads to profitability, and by Virgin's closed nature, the network can only be used by the number of customers Virgin can win - unless wholesale access is made readily available to others. Back in May, Virgin denied plans to offer wholesale access to its network, but one has to wonder why it should refuse to do that? Surely, it is better to be selling capacity on an existing network as more usage means that bit transport costs tend to zero? Additionally, revenue coming from outside the family is a good thing, mitigating maintenance etc costs to other businesses rather than just the VM Group.

Virgin Media seem to run a tight-lipped ship, with little word from them yet on COTS, Digital Britain etc, nor do they seem to be leaping up and down to speak at nor sponsor the plethora of interesting events in the coming months.

It will be interesting to see whether the Hatt/Cornwall trials are part of the decision-making process on this issue. If Virgin believe they can corner a substantial proportion of the rural market ie our First Third (telcos' and policitians' Final Third) with VDSL2, this could see a significant uplift to revenues as well as a land grab, meaning that wholesale open access to their cable network would be less inviting. For Virgin. What it may mean in SMP terms though is open to further debate.