Virgin Media Wi-Fi Strategy Shows "Untethered" Implications

Virgin Media has decided not to bid for new fourth generation network spectrum in the United Kingdom, something it had been considering, in light of its wholesale provider EE getting a go-ahead to build such a network using existing spectrum.

In essence, Virgin Media also says it has decided to remain a mobile virtual network operator, and not become a facilities-based provider. Like any other business decision, there are any number of reasons why capital is deployed in support of one strategy, and not another. 

A rational executive in the fixed network business might well wish to avoid becoming a fourth provider in a highly-competitive market, especially when there are other uses for investment capital in the arguably core fixed network. 

One other angle is that the value of an "untethered" (Wi-Fi) network as a "spot" overlay to any other wireless or untethered services provider (essentially, any fixed network operator using Wi-Fi as the local distribution) is growing. 

As Virgin Media sees matters, the financial return from creating new metro and other "hotspot" service as a wholesale service, sold to other service providers, could well provide a better return on investment than building a new facilities-based mobile network. 

That isn't to say public Wi-Fi is a substitute for mobile service, only that public Wi-Fi can be a very useful complement to mobile service. Virgin Media also believes some mobile service providers will want to buy such service wholesale, instead of building their own small cell networks, at least in some locations.