Virgin Media is reportedly considering a takeover of Hull-based telco KCOM in a bid to accelerate its nationwide network expansion.
The Daily Telegraph says Virgin Media executives are encouraged by a major profit warning issue by KCOM in November, caused by the poor performance of the company’s B2B unit, but that such discussions were at an early stage.
Virgin Media is currently in the middle of the single biggest network expansion in its history. The £3 billion ‘Project Lightning’ originally aimed to expand coverage to 17 million properties by the end of 2019.
While some of these premises will be added to the cable network, Fibre to the Premise (FTTP) will play a significant role. The acquisition of KCOM would accelerate deployment and give Virgin Media access to an entirely new market.
BT and Virgin Media do not operate telephone or broadband services in Hull due to KCOMs historic advantage in the city. As a condition of its licence renewal in 1914, KCOM was required to purchase the local telephone infrastructure, whereas other regional telecom groups were absorbed into the General Post Office (GPO), which became BT.
A key difference, aside from white phone boxes, is that KCOM has used Fibre to the Premise (FTTP) for its superfast broadband rollout, rather than the Fibre to the Cabinet (FTTC) deployed by Openreach.
This means large parts of the region has access to some of the fastest speeds in the UK, but critics argue the company enjoys a monopoly – even though it is required to provide wholesale access to its infrastructure.
Virgin Media declined to comment on the reports, while KCOM has been approached.