With the caveat that facilities-based competition in the consumer internet access business might not be feasible in many markets, Three is about to launch a facilities-based assault on the U.K. consumer internet access business using fixed wireless, joining Virgin Media as a major facilities-based provider of such services across the United Kingdom.
Virgin Media has 5.7 million accounts. Assuming there are 25 million U.K. homes, Virgin’s customer base is about 23 percent of all U.K. domiciles.
U.K. mobile operator Three, part of the Hutchison company’s holdings, plans to build a fixed wireless network reaching about 40 percent of U.K. customers, nearly the same percentage of U.K. homes reached by Virgin Media’s hybrid fiber coax networks.
It is not yet clear how the footprints (Virgin and Three) will overlap, but the move means a new facilities-based provider will have a big presence in the U.K. fixed internet access market. But it might not be unreasonable to suggest Three’s fixed wireless network might be able to garner share up to about 20 percent.
Virgin's network passes about 40 percent of U.K. locations. U.K. mobile operator Three, part of the Hutchison company’s holdings, plans to build a fixed wireless network reaching about 40 percent of U.K. customers, nearly the same percentage of U.K. homes reached by Virgin Media’s hybrid fiber coax networks.
One touted business advantage of the facilities-based approach is ability to differentiate an offer. In the United States market, for example, cable operators have been able to exploit a different platform (hybrid fiber coax) to leapfrog digital subscriber line and, at least in the past, many fiber to home networks.
Three might be able to create a new value proposition (high speeds, lower cost), especially compared to any retail internet service provider using the Openreach wholesale platform for access.
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