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Virgin Media opens bandwidth choke for 50Mb launch

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Virgin Media's new 50Mbit/s broadband offering has gone on sale today to about 1.5 million homes, costing up to £51 per month, plus £50 installation fee. For a while at least, it will be the only cable broadband package without a bandwidth-throttling policy.

Technology to serve the "XXL" package will be rolled out to about 40 per cent of the 12.6m premises covered by Virgin Media's cable network by the end of this year, the company said. The remainder of the ex-Telewest and NTL infrastructure will be upgraded to handle the DOCSIS 3.0 standard by the end of summer 2009.

Customers who agree to take £11 per month Virgin Media home phone line rental will be offered 50Mbit/s broadband for £35 per month. With a basic cable TV package, "triple play" starts at £66 per month. "You get what you pay for," said CEO Neil Berkett.

The packages include an engineer call out to install a compatible new cable modem (pictured here). South London, the Midlands and Scotland are the first regions to be upgraded.

Berkett said that to begin with the "premium" 50Mbit/s service will not be traffic managed. Virgin Media throttles the bandwidth available to heavy users on its other broadband packages at peak times. Berkett added that restrictions will be introduced around the same time the rollout is complete, however.

Once 50Mbit/s is available to all its customers the firm will look towards 100 and 200Mbits/s, as consumer bandwidth demand continues to rise. "50Mbit/s in a couple of years will not be enough," Berkett said.

Capacity will be freed by shutting down the analogue cable TV signal next year. Berkett said upgrades to Virgin Media's broadband network will pave the way for consumers using the internet while watching TV, via integrated set-top boxes.

It has seen traffic on its network increase 70 per cent in the last 12 months and has set itself a target of 4m homes on next generation access (50Mbit/s and above) by 2011.

"We have started what needs to start by risking our money," said Berkett. "We look forward to competitors responding with their money."

BT, Virgin Media's main rival in internet provision, has so far committed £1.5bn to upgrading parts of its network for faster broadband. A full national upgrade to 100Mbit/s could cost as much as £29bn, according to industry estimates. BT has so far announced two small trial areas in London, and Wales will be offered 40Mbit/s in early 2010.

Berkett refused to provide a specific figure, but said a significant proportion of Virgin Media's £600m 2008 capital expenditure had been spent on the programme. About the same would be laid down in 2009, he added. Since becoming CEO in mid-2007, Berkett has pushed broadband to the forefront of Virgin Media's offering, seeking to fully exploit the massive investment in fibre optics made by cable companies in the 1990s.

Ofcom recently confirmed that it has no plans to force the cable monopoly to open up its network to competitors, as it did with BT with the creation of Openreach in 2002, because its market power is not as strong. Berkett told The Register it was not inconceivable that Virgin Media might one day decide to offer wholesale access without regulatory pressure, but there were no plans to yet. "We're in a position of no interference while we develop this market [for next generation access]," he said.

The 50Mbit/s availability checker is here. ®

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