Virgin Media Inc.
) - a leading entertainment and communication service provider in
the U.K. is planning to charge people for using its WiFi
underground network in London from January 2012 onwards.
Higher adoption of tablets and smartphones has propelled
demand for internet data, thereby exerting more pressure on
network traffic. Moreover, with the growing popularity of
numerous social networking sites, people always like to stay
connected with their loved ones, which isn't always possible, at
times when they are in an underground metro due to network
unavailability. More than 700,000 people using underground metro
remains connected to Wi-Fi network.
So, by looking at the needs of the people as well as by
shifting the huge data load from its network, Virgin Media has
rolled out Wi-Fi network services in and around the city of
London especially at underground metro stations where the network
is quite weak.
Previously, Virgin Media had set a target of offering its
Wi-Fi network services across 120 underground metro stations by
the end of 2012. Till now, the company has been able to cover 72
stations and plans to add 20 more stations by the end of this
year with further inclusion of 28 stations by the beginning of
Earlier, the Wi-Fi network service was freely available to
other telecom subscribers. However, from the next year onwards
they will be charged £2 per day, thereby creating another revenue
stream for the company going forward.
However, the underground Wi-Fi network service will remain
free for its own broadband and mobile customers,
) and EE telecom subscribers.
However, we also remain highly apprehensive about the success
of the new revenue stream as both Vodafone and EE, will get the
underground WiFi service free of cost, which constitute 76% of
the total customers in Greater London.
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.
VIRGIN MEDIA (VMED): Free Stock Analysis
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