Virgin Media (VMED) became the first company in U.K. to offer super fast Internet speed of up to 50Mb to over 12 million homes.The new 50Mb service is expected to satiate the increasing consumer demand for faster broadband speeds and greater bandwidth.The company has been working towards the goal for the last 18 months upgrading its network capacity using latest DOCSIS 3.0 technology.The company has tripled its network capacity.
The increase in network capacity signifies enhancement in the service offered to broadband subscribers with the transition of 10Mb and 20Mb customers to the latest DOCSIS 3.0 network, freeing up capacity for increased traffic on the existing DOCSIS 1.0 network.
A new pricing plan was announced by Virgin Media for its 50Mb service.With effect from September 1, 2009, the company will lower the monthly subscription for its 50Mb service to GBP 28 for its new and existing subscribers, taken with a Virgin Phone line or to GBP 38 if taken as a single product.
Virgin Media has upgraded its existing 2Mb and 4Mb customers to 10Mb service to ensure that all its customers can take best advantage of the Internet offer enabled by Virgin Media’s investment in Next Generation Broadband platform.The company also has a competitive advantage over DSL providers.The average speed of the company’s 10Mb service is twice as fast as DSL’s 8Mb service.
With a speed of 50Mb the customers can now download a TV show nearly in one minute, an entire music album in 11 seconds, a high quality movie in approximately 3.5 minutes and a HD movie in about 15 minutes.The new service strengthens Virgin Media’s unique position as the catalyst for high speed broadband adoption.Virgin Media seeks to increase the speed to 200Mb.However, the company may face competition from other players in the U.K. market who are also offering broadband service.
We maintain our Buy recommendation on the stock with a six-month target price of $7.75.
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