Virgin, Liberty Global invest £3 billion in UK broadband

The companies have pledged the largest investment to UK broadband in over a decade -- but the devil is in the detail.

screen-shot-2015-02-13-at-09-27-34.png

Virgin Media and Liberty Global plan to invest £3 billion in improving fiber optic broadband networks, increasing Virgin's reach from 13 million to 17 million homes and creating 6,000 new jobs.

Announced on Friday, the companies said the investment is part of "Project Lightning," the largest single investment to UK broadband infrastructure in a decade.

Virgin Media and parent company Liberty Global will extend Virgin's fiber network to approximately four million new homes over the next five years, with an overall aim of connecting 17 million premises by 2020.

Virgin says the £3 billion investment will generate £8 billion in terms of the UK economy.

The investment is expected to create 6,000 new jobs in the United Kingdom. In addition, Virgin announced plans to increase the number of apprenticeship spots with the firm by 1,000 over the next five years -- double the current 1,000 places available. These positions will include support roles in engineering and sales.

Mike Fries, Liberty Global Chief Executive Officer, said in prepared remarks:

"Our next-generation fibre-rich networks reach 50 million households across Europe, enabling our customers to discover and experience the endless possibilities of the digital world. After a record operating performance, Project Lightning is a significant investment that demonstrates the confidence we have in Virgin Media and the UK as a place to do business."

While Virgin is already expanding its high-speed fiber network to 110,000 homes across areas in London and Glasgow, among others, it is worth noting the £3 billion investment will be "prioritised according to demand from households and companies." Interested parties can apply for Virgin to consider different areas for cable, but the broadband provider says there will be a "focus on areas closest to Virgin Media's existing network."

Read this

The working visa: A tricky subject for technology companies

The enterprise must go global to remain competitive in modern-day business -- but how do visa restrictions impact growth?

Read More

Despite any investment into the UK's broadband infrastructure being welcome, this means that rural areas -- which often are stuck with poor speeds and connectivity -- are likely to lose out.

Ewan Taylor-Gibson, broadband expert at uSwitch.com told ZDNet:

"Virgin Media's hefty cash injection will have a marked impact on UK broadband infrastructure, benefiting consumers and creating jobs in the process. More competition and faster speeds can only be a good thing for Brits. Almost two thirds of broadband users now consider themselves heavy or moderate internet users, so the need for superfast speeds is becoming all the more urgent.

But the devil is in the detail. Virgin Media will focus its expansion in areas closest to its existing network, based on consumer and business demand. This could mean rural customers are knocked down the priority list if there aren't enough residents in remote areas to convince Virgin to 'Cable My Street."

Read on: In the enterprise