How Many People Will Buy a 50 Mbps Access Service?

Virgin Media now says it has 20,000 subscribers buying its 50 Mbps service. Virgin Media has about 3.77 million broadband access customers. So that suggests about one half of one percent of its customers are buying that grade of service.

I'd be willing to bet U.S. service providers offering a 50 Mbps service are doing about that rate as well, with one possible exception. SureWest Communications has been offering tiers that fast longer than anybody else I can think of, and probably can claim a higher subscription rate.

Virgin Media's current promotion for the 50 Mbps product offers a price of £18 a month (about $29.74) for three months and £28 (about $46.26) a month after that, when bundled with aVirgin Media phone line.

Those sorts of prices will make U.S. consumers jealous, but it is hard to compare pricing across regions and nations. Voice and text message prices on mobiles are far higher than in the United States, though broadband and video entertainment prices seem to be lower, across the board.

SureWest's 50 Mbps and 100 Mbps products are different, though, as they offer symmetrical bandwidth, not asymmetrical as is typical of DOCSIS 3.0 services such as provided by Virgin Media.

When SureWest first introduced its 50 Mbps symmetrical product, it was available as part of a high-end quadruple play bundle including the 50 Mbps access service; a 250-channel digital TV service; unlimited local and long distance telephone and unlimited wireless.

The package was priced at $415.18 a month. If it were offered on a stand-alone basis, SureWest said the 50 Mbps service would be valued at $259.95 per month. Not many consumers are interested in paying that much.

Embracing Failure

"We're not afraid of occasionally falling flat on our face," says Richard Branson, Virgin Group CEO. And therein lies a noteworthy difference in thinking about innovation that obviously has implications in the global telecom business. One of my business associates at Verizon would react in horror if anybody suggested Verizon itself should be more venturesome in trying new things. "We have a reputation to protect," he constantly says.

Of course, so does Virgin Group. But that's one reason why innovation is going to come from outside the ranks of the tier one global carriers, though some carriers are showing themselves more amenable to working with innovators.

Virgin, like Google, has a culture that values experimentation and risk-taking. And if the game is innovation, as I suspect virtually everybody in the global telecom business would acknowledge is the case, then the likes of Virgin and Google, which also isn't afraid to try things that don't work, is the way forward. on the innovation front.

What the incumbents can do is figure out how to work with Google. That's heresy in some quarters, but the conclusion seems logical enough. If innovation is essential, and if one knows one cannot innovate quickly, or take many risks, as a matter of policy, then one has to have partners who will do that on one's behalf.

And as the graphic suggests, even successful and important innovations ultimately can run out of steam. Dell turned the PC distribution business upside down at one point. But its competitors have long since caught up, leaving Dell the contestant that has to change.