Virgin Media plans free Wi-Fi network for London

The ISP is considering offering people in London free access to a network of Wi-Fi hotspots in an attempt to keep up with competitors' bundled offerings

Virgin Media plans to offer Londoners free Wi-Fi access in parts of the capital, with the first phase of the rollout expected soon.

London skyline

Virgin Media is to roll out a free public Wi-Fi service in parts of London. Photo credit: Starphysh/Flickr

The communications and media provider hopes to reuse its existing underground and broadband cabinet infrastructure to deliver the Wi-Fi service, ZDNet UK has learned. However, it does not rule out the possibility of expanding the infrastructure underpinning the service in the future.

At the moment, Virgin is looking into giving non-customers free Wi-Fi access at speeds of 0.5Mbps, while customers will get up to 10Mbps, the company's chief executive Neil Berkett told investors last week. The scheme will proceed according to agreement with local authorities, he noted.

"We are in quite advanced conversations with some boroughs and councils in respect to being able to complete a metro rollout in parts of the London area," Berkett said in an investor call. "It will obviously be dependent on those negotiations, but I am optimistic we will have the first of those in the not-too-distant future."

Virgin's business arm is already working with Westminster Council to provide the infrastructure for a pan-London public sector network (PSN) for services such as phone, data, video, CCTV and Wi-Fi, with bandwidths of up to 1Gbps.

'Taking a punt'

Berkett said Virgin is taking a "punt" with the free public Wi-Fi scheme, which he expects to cost the company a few million pounds. He noted it will not play a large role in the company's finances during 2012, but was important to Virgin Media as part of "resourcing and investing in advancing digital lifestyles".

"I think it is a real opportunity, if you think about the gap that is increasingly occurring between consumers' needs for data outside the home and what they can get on 3G," he said. "In fact, [they get] the power of a reasonably consistent 5Mbps, 6Mbps, 7Mbps across a Wi-Fi network, versus the spottiness that you'll get through [retail] business."

The scheme would provide a free competitor to public Wi-Fi hotspot services such as BT's OpenZone and its Fon partner network, which are not free to non-BT customers.

ZDNet UK understands that Virgin Media's scheme would not need to use customers' residential Wi-Fi connections to provide the public hotspots, unlike BT's network, which uses customers' Home Hub boxes to provide the connections.

Keeping up with the Joneses

Rob Gallagher, mobile and broadband analyst at Informa, believes Virgin's aim with the London network is to keep up with competitors in the bundled services market.

"With BT already aggressively pushing Wi-Fi as part of its broadband packages, Sky acquiring public Wi-Fi hotspot provider The Cloud and O2 announcing plans to launch its own ad-funded hotspot network, Virgin clearly feels the need to add Wi-Fi to its bundles," Gallagher said.

Off-loading traffic generated by its mobile broadband subscribers to Wi-Fi would also help Virgin to save considerably on the fees it pays to piggyback on Everything Everywhere's network.

– Rob Gallagher, Informa

"In this sense, Virgin's move would be less about undermining pay-per-use services like BT OpenZone, and more about keeping up with the Joneses — BT and Sky — in the residential broadband and TV market," he added.

Gallagher noted that Virgin has been trialling a similar public Wi-Fi scheme in Ashford, Kent — a sign that its Wi-Fi ambitions go beyond the capital. For the Ashford network, Virgin is attaching routers to street lights and considering using its retail stores to power the Wi-Fi hotspots.

"While Virgin is reportedly considering offering 512Kbps access to all for 'free', the company's main intent appears to be to win and keep new and existing subscribers by offering them 10Mbps access as part of their subscriptions," Gallagher said.

Virgin could also see a benefit from getting its customers to use Wi-Fi rather than 3G for their broadband connections when outside the home, the analyst suggested.

"Off-loading traffic generated by its mobile broadband subscribers to Wi-Fi would also help Virgin to save considerably on the fees it pays to piggyback on Everything Everywhere's network as a mobile virtual network operator (MVNO)," he said.

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