Virgin Media Business Makes the Most of its Network Strengths with ‘Big Red Internet’

Event Summary

September 29, 2010 - Virgin Media Business has announced the launch of its new ‘Big Red Internet’ fibre access service. The service provides uncontended connectivity and provides a managed or unmanaged option at port speeds of either 100 Mbps or 1 Gbps. The managed service includes router configuration and network monitoring. The service is available on a three year contract and the 100 Mbps service costs GBP 12,000 per annum unmanaged, GBP 13,000 per annum managed; the 1 Gbps service costs GBP 22,000 per annum unmanaged, GBP 25,000 per annum managed.

Quick Take

Analytical Summary

• Current Perspective: Positive on Virgin Media Business’ launch of ‘Big Red Internet’ because the operator is playing on two of its natural strengths – the scale and capacity of its network and the strength of the ‘Virgin’ brand. The product is an effective repackaging of the company’s existing Ethernet capabilities with a strong, simple message (unlimited bandwidth up to 100 Mbps and 1 Gbps for a flat fee) that will increase Virgin Media Business’ overall competitiveness in the UK SME market. Virgin Media’s only real concern is that the economic climate may push customers towards cheaper, lower bandwidth solutions.

• Vendor Importance: High to Virgin Media Business, because BT’s investment in FTTC and FTTP services as well as its launch in 2009 of EFM services had seen it develop an arguably stronger access portfolio than Virgin. This launch also gives the operator a strong response to niche service providers, such as Easynet and Exponential-e’s, dedicated fibre services.

• Market Impact: High on the UK SME market, because Virgin Media Business has upped the ante in terms of bandwidth provisioning for medium and small sized businesses. The majority of Virgin’s competitors can deliver 1 Gbps Ethernet solutions, but as part of a broader WAN solution rather than as an off the shelf fixed access solution.

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