It's been announced that Liberty Global has bought Virgin Media, the UK cable operator, for around £10billion. According to one report I read, some analysts were predicting that Liberty might actually invest in new cable infrastructure to increase the reach of Virgin Media here in the UK, which is currently 55% of the population.
I sincerely hope those analysts are right. Virgin Media has 4.9million subscribers, whilst Sky, the only competition for Virgin Media, has over 10 million subscribers and covers almost all of the UK. If Virgin Media is to be truly competitive with Sky, then it needs more cable layed to cover the 45% of the UK that it doesn't already cover.
Of course, this will require many tens of billions of pounds in order to provide that extra coverage, as all the areas that need to be covered are mainly rural areas. All the main cities have been cabled already. Areas like Cornwall have no cable infrastructure at all, and some areas like North and East Devon and Somerset have areas nearby that have been cabled, such as Exeter and Bristol. But in all those areas, and many others, Sky is the only choice for Subscription Television.
If Liberty Global do invest in new cable infrastructure, then Sky will have a proper competitor for the first time since On Digital folded back in 2002. There is no doubt that the recent phone hacking scandal has weakened Sky and more especially, parent company NewsCorp, so it will be interesting to see how they handle a stronger competition in the Liberty Global owned Virgin Media.
