Wounded Virgin Retreats After Sky Battle

02 November 2007

LONDON: UK-based American cable firm Virgin Media is to promote high-speed broadband as its 'hero' product after admitting it cannot compete with News Corporation's satellite monopoly BSkyB in the pay-television arena.

Virgin's acting ceo Neil Berkett told a media conference that the company would now focus on broadband after its pricing dispute with Sky, which triggered the withdrawal of the latter's channels from the VM platform with the comcomitant loss of some 40,000 subscribers.

By contrast, Berkett argued that the fiercely competitive nature of the UK broadband market has made high-speed web access into much more of a commodity.

Virgin, which unlike Sky and most other rivals, does not rely on UK telecoms near-monopoly BT to connect broadband services into homes, currently offers bandwidth of 20 megabits to some customers, with tests reaching up to 50 megabits.

The company, together with other UK broadcasters, triggered media regulator Ofcom's current investigation into whether Sky is trying to limit competition in the pay-TV market.

Relations between the two companies, however, have thawed somewhat since Berkett took over the reins at VM, and he is reported as saying he would "love" to have Sky's channels back.

Data sourced from BrandRepublic (UK); additional content by WARC staff