Virgin Media Inc.
) - a leading entertainment and communication service provider in
the U.K. is planning to launch small cell as a service (SCaaS),
which will enable it to provide faster and much more cost-efficient
mobile network infrastructure.
Small cells like femtocells and microcells are low-powered radio
access nodes that run on licensed and unlicensed spectrum lying
within a wide range of 10 to 200 meters. The small cell sites,
which form an integral part of 3G network and telecom carriers will
have to incorporate these into their 4G LTE network if they want to
withstand unprecedented growth of mobile data traffic.
Virgin Media will acquire the small cell sites and assemble
street furniture like lamp posts, for hosting the cells. They will
also provide the necessary power supply, mobile backhaul
connectivity and the combined service to the mobile operators. The
New York-based company has already started its LTE trial run in the
cities of Newcastle and Bristol and has recorded a speed of 20 Mbps
at a distance of upto 350 meters from the nearest cell.
We believe that SCaaS as a business will be hugely beneficial
for the carriers as they will be relieved from the challenges of
site acquisitions and backhaul costs for small cell network
deployment. The company is planning to try out the service
initially with one or two mobile operators and could target its
existing mobile backhaul customers. However, as LTE subscriber base
improves in the U.K., the company could face competition from rival
BT Group Plc
The current Zacks Consensus Estimate for Virgin Media Inc. is
pegged at 43 cents for the third quarter of 2012 with a growth rate
estimate of 257.4%. For 2012, the Zacks Consensus Estimate stands
at $1.63 with a growth rate of 806.94% while for 2013, the Zacks
Consensus Estimate stands at $2.36 with a growth rate of
We are maintaining our long-term Neutral recommendation on
Virgin Media Inc. Currently, it has a Zacks #3 Rank, implying a
short-term Hold rating on the stock.
BT GRP PLC-ADR (BT): Free Stock Analysis Report
VIRGIN MEDIA (VMED): Free Stock Analysis Report
To read this article on Zacks.com click here.