back to article Virgin Media boss warns Brexit could hamstring broadband investment

Further uncertainty over Brexit could hamper Virgin Media's ability to get more broadband investment for the UK from its parent company Liberty Global, chief exec Tom Mockridge has warned. Speaking at the Broadband World Forum event, he said: "We need certainty over the outcome of Brexit," adding that when the business makes …

  1. FuzzyWuzzys Silver badge
    Facepalm

    Christmas Time is here!

    Brexit is like Christmas for companies who've been desperate to put their prices up. With no real world evidence that things will be worse, 'cos no one can see 2 years into the future, they're all telling us now that they will have no choice but to screw us over with price hikes.

    1. Jason Bloomberg Silver badge

      Re: Christmas Time is here!

      The company I am working for has had to put its prices up because imports of USD priced items have risen by some 17% since brexit. Charges for using services in the US have also increased.

      These aren't "price hikes" the company wants to make, but it is that or trim back the business. And it's a horrible Catch 22 because it's either keep prices down and trim the business or increase prices and lose business to those better placed to absorb costs.

      It doesn't matter where things are in six months or two years time; they are having to deal with things as they are now, increased import costs and and the cost increases which have been absorbed ever since the exchange rate moved.

      It was hoped exchange rate turbulence would be short lived; it hasn't been, and there is no guarantee it will be better any time soon. It could even get worse when the government triggers exit next March, and again when we leave in 2019.

    2. ewan 3

      Re: Christmas Time is here!

      The impact of a hugely weakened pound isn't going take two years to hit. For real world evidence go and buy something in dollars or euros and see how much it more it costs you.

      1. Anonymous Coward
        Anonymous Coward

        Re: Christmas Time is here!

        Petrol going for £1.31/litre alrready. Before 23rd June, it was £1.12/litre at the same place.

        Ok, so this was on the M1 but this is a foretaste of what is to come when the pound sinks to less than £1==$1.

        Did you honestly expect the rosy picture of the UK post BREXIT painted by Farage and crew was actually true. Where's the £130M/week for the NHS now eh?

        Oh, and with that exchange rate expect many more UK businesses to get bought up by Johnny Foreigner and the whole thing shipped overseas.

        We are up shite creek.

        We (sic) voted for this so get used to it.

        1. Dave 15 Silver badge

          Re: Christmas Time is here!

          We haven't left so we are still paying the millions to be in a club we rejected. Frankly the politicians should have already pulled the plug on that but they haven't the balls.

          Add to this that the government are failing to stand by people wanting to export (yes, I did some applications for help exporting to get squat, while at the same time - purely for comparison - did the same with the German government and was offered a significant package of financial and organisational help).

          1. Charlie Clark Silver badge

            Re: Christmas Time is here!

            Frankly the politicians should have already pulled the plug on that but they haven't the balls.

            How exactly?

            Oh sorry, this question was one of the reasons why the referendum was a Bloody Stupid Idea™. The UK has an armful of international obligations and benefits because of EU membership. It is going to take years to unravel and replace them which is why the government has proposed the "great repeal act" which would enshrine all existing EU legislation on the statute book. Apart from the fact that I think the proposed act would itself be unconstitutional, a quick look at the success of governments in actually repealing legislation should give an idea of how long things might take.

            Meanwhile the pound will fall as FDI falls if access to single market is limited. Think petrol prices are high now? You've got another thing coming.

    3. Phil W

      Re: Christmas Time is here!

      "With no real world evidence that things will be worse"

      Sure, there's no evidence things will be worse, it's hard to have evidence about the future particular when the planned shape of that future has yet to be detemined, but there is evidence that things are already worse.

      Most price rises we're seeing now are as a result of a fairly steep decline in the value of GBP against both USD and EUR, causing import costs to sky rocket immediately for any business without currency hedging and with a clear expectation of them sky rocketing for those who did hedge.

      With further declines in GBP value likely and expected up until the UK reaches a new deal with the EU and/or Article 50 is actually triggered and the two year leave period has passed, businesses have no choice but to raise prices for the time being. (I admit there may well be some profiteering going on but there are genuine cost increases as well).

      Whether GBP will continue to decline after the actual exit/new trade deal negotiation remains to be seen. It's perfectly possible it's value could rise back to where it used to be it. But businesses cannot base their current pricing on the possible value of the currency in an uncertain future in 5 - 10 years time, they can only base it on the current value of the currency and what that makes their costs come out at now and perhaps at best the predicted value of the next year or so.

      As for companies saying their prices will continue to rise after Brexit is complete? That seems a perfectly reasonable thing to say, given that the current currency value has dropped and is continuing that trend as a result of the referendum result, but before Brexit has actually happened, it is reasonable to predict that the same trend could continue following the actual exit.

      Sure it might not, but would you prefer companies who believe that their prices will be affected to lie to you and tell you that they won't need to put their prices up and if it then turns out they do just say "Sorry we have to charge you more after all"?

    4. Valerion

      Re: Christmas Time is here!

      Purrrlease - VM have never needed an excuse to increase prices. They do it approximately twice per year with no reason or justification.

    5. Gordon Pryra

      Re: Christmas Time is here!

      "With no real world evidence that things will be worse"

      If you ignore the value of the pound and the cost to GovUk of borrowing, yeah, then in this fictional world where people cant work out the obvious then your arguement would be good.

      But in REALITY many ‘remain’ voters feel they need a holiday or a long sleep after the tiring experience of trying to reason with people who completely reject logic or evidence.

    6. pauleverett

      Re: Christmas Time is here!

      Britain is an import nation. the pound is down ±25%. that means anything you import is at least 25% more expensive, to source, right now, in reality. Now you do have stocks, contracts, and other mechanics to buffer things for a while, but you can be absolutely sure, that those increases in purchasing cost, will soon be passed to the consumer,100% and then some. That is not opportunistic, it is economic reality, and if anyone voted for brexit, and didn't see serious prices hikes ahead, they had their head up their bottoms.

  2. Robigus

    Pot -> Kettle

    My VM bill has risen 34% in 4 years.

    That was pre-Brexit.

    They engaged with me on Twitter about it once, injecting weasel-feel-good words here and there until I produced maths. Then they went quiet.

    Now Liberty Global have taken control of F1, I shudder to think how much vapid waffle and speculation they can wrap around it, before demanding more money for the privilege.

    1. Doc Ock

      Re: Pot -> Kettle

      >>Now Liberty Global have taken control of F1,

      F1's been crap and uncompetitive for decades, touring cars are far more fun and competitive to watch and it can't hold a candle to caravan racing.

      1. Robigus

        Re: Pot -> Kettle

        I used to love BTCC, then it all went wrong wheel drive. I have a note from my doctor to avoid that sort of thing.

        Has it changed?

    2. Jason Bloomberg Silver badge

      Re: Pot -> Kettle

      My VM bill has risen 34% in 4 years.

      So a compound rate of increase of around 7.7% per year. If it stays the same, next year it will be 45% more than you were paying.

    3. Ralph Online

      Re: Pot -> Kettle

      Just a minor correction: It's Liberty MEDIA are taking over control of F1. This is a US/media company. Liberty GLOBAL is an international telecoms company - mostly Cable, mostly Europe+South America. The latter was spun out from the former, though both are still controlled through special shares by John Malone.

  3. old_IT_guy

    Liberty Global are gougers

    they've hiked prices twice at least since taking over, they are all about maximising their profit - which is fair enough, customers (like me) can always walk away (and I will), but their whining about Brexit consequences is pathetic, just a play to get more government money to throw away not providing any wider or better service.

    Leave LG (VM) they are scum, I certainly am leaving at the end of my contact.

    1. Gordon 10 Silver badge
      Mushroom

      Re: Liberty Global are gougers

      Agree - I had a note saying that I was getting a free 200Mb speed upgrade, 9 months before it happened. During that 9 months I then got 2 price rises before the "free" speed came on line.

      Im only still with them as the BT line has rotted away and needs re-running.

    2. Anonymous Coward
      Anonymous Coward

      Re: Liberty Global are gougers

      All broadband providers are scum. I am on VM and unfortunately they are effectively the only I have. BT infinity in my area only goes upto 30Mb whereas I get the full speed Virgin package.

      I moved from BT to Virgin as I got tired of waiting for BT to upgrade and I hate the opaque nature of BT. They don't care about their customers. There is no effort to improve services only to reach the next marketable milestone. Fuck BT.

      Also, in terms of speed nothing really competes with Virgin. Its a different league entirely. The only way I could get similar speeds is if i sign up for a buttfucking from a leased line provider.

      I feel no loyalty to VM, I just have no choice.

      Picking a broadband provider is like picking your favourite terminal illness.

      Im starting to feel the same way about a lot of other things as well. Like supermarkets, petrol stations, politicians etc

      Not matter what you choose its all basically the same shit with very similar pros and cons. If you're lucky you might find a small benefit for yourself but it never comes without negatives.

  4. PaulR79

    Price rises again then?

    As they've increased prices a few times already this year with another due in November I can safely assume that this means yet another soon after in the new year. The 'value' in the offering is starting to get very thin on the ground for me. They can increase my broadband as much as they want. I somehow doubt that if they freeze speed increases they will also freeze price increases.

  5. Omgwtfbbqtime Silver badge

    "Hamstring investment"

    What investment?

    I moved last year to an area just outside of that already cabled. For the record it's not newbuild - mid 1930's in fact.

    Registered interest in their Cable my Street site and got a we'll be in touch response.

    No response received - so Sky got our money for this year and looks like next year too.

    Nearest cable is about a mile away down the same road and there is lots of expensive newbuild that would be perfect targets for selling BB and TV to.

    1. Ledswinger Silver badge

      Re: "Hamstring investment"

      Registered interest in their Cable my Street site and got a we'll be in touch response.

      As an unhappy VM customer who has seen the costs go up and up and up, I'd say avoid the horrible, expensive company. The difference between (say) 30 Mb/s and 150 b/s is not really noticeable for most uses, so you end up paying a lot for speed you rarely use.

      I've little time for Sky, BT and most LLU resellers, but Virginmedia is one company I'd specifically recommend people stay away from purely on account of the poor value for money.

    2. BigAndos

      Re: "Hamstring investment"

      Yes they do an excellent job of hamstringing their investment by not making any! My old flat in the middle of north london was in a new build block. I was surprised to find I couldn't get cable, and when I checked the blocks either side were in fact covered. Because mine had been built later they apparently couldn't/wouldn't connect it up. I'm not sure they ever actually fill in the gaps in their current network let alone expand it!

      1. John Brown (no body) Silver badge

        Re: "Hamstring investment"

        "Because mine had been built later they apparently couldn't/wouldn't connect it up. I'm not sure they ever actually fill in the gaps in their current network let alone expand it!"

        Just for balance, and without prejudice for or against LG, VM have not been investing in network expansion for years, but since LG took over they have actually started installing cables again. I'm also not happy with the price rises either, but it's not as if it was unexpected that there would be prices rises shortly after a take over. Inverters always want the fastest ROI they can get.

        My solution in the short term is reducing the package size. Even their cheapest BB is fast enough for me and we are watching a lot less TV these days so reduced the TV package down also.

  6. Jay 2

    Start investing and laying some fibre, then we'll listen...

    Given that VM (or even NTL as they were then) are fairly well known for not actually laying any fibre, then I'd treat that sort of investment comment with a pinch of salt.

    And as for them complaining about BT having all this (pre-paid) infrastructure, then they may want to take note of what I've said above to remind themselves how much fibre they've actually laid as of late and how much (or little) did they previously pay for all those bankrupted/unprofitable local cable companies?

    1. AndrueC Silver badge
      Meh

      Re: Start investing and laying some fibre, then we'll listen...

      Given that VM (or even NTL as they were then) are fairly well known for not actually laying any fibre

      Until recently, yes, but as mentioned in the article Project Lightning involves laying quite a lot of new fibre.

      "Virgin Media will extend its unrivalled fibre-rich network to approximately four million additional premises over the next five years."

      Not that I'm a fan of VM but I feel that the telecoms industry has too much hype already so I do try to be fair and impartial. I don't think it's fair any longer to accuse VM of never laying fibre. Sadly the downside for their existing customers is an increase in prices. I would imagine the only way VM could get £3b out of Liberty Global was by promising a good rate of return.

      That's probably why the first time they made a profit was in the run up to the sale. I guess they had to prove to LG that it was possible to make money off cable services in the UK.

    2. PatientOne

      Re: Start investing and laying some fibre, then we'll listen...

      You do know that when cable was introduced you had a lot of different companies laying their networks, most of which was fibre (as that's what was required), and that NTL, then VM, bought those companies and inherited the existing fibre network?

      So VM hasn't had to lay much fibre - only what they need to expand their network.

      Now I can't say how they've been doing on that latter issue: I've not worked for cable since the initial build period (Late 90's) but I know they have been doing some and keep promising cable to areas that they've still not extended into so it's a bit of a mixed bag, there.

      As to the price hike: Some companies take every opportunity to do so, others try to keep it to a minimum. VM seem to be amongst the former, but again, never worked for them (was with one of the early companies) so don't know what they're like.

      1. Ralph Online

        Re: Start investing and laying some fibre, then we'll listen...

        All those companies (NTL, Telewest etc..) laid HFC = Hybrid Fibre Coax, so it was only fibre in the aggregation network, then a fibre node to convert to Coax cable to your home. And it was all analogue. Now it's digital.

        NOBODY puts Coax in the ground anymore.

        Project Lightening is laying modern fibre to the home. I think they are genuinely extending their coverage. Though I think much of it will still behave like HFC (RFoG). I would suspect they want/need better coverage to increase their potential number of customers (Homes Reached To Marketing) and compete with Sky and BT. Not sure how the reported price increases will help them though!

      2. John Brown (no body) Silver badge

        Re: Start investing and laying some fibre, then we'll listen...

        "So VM hasn't had to lay much fibre - only what they need to expand their network."

        Yes, in the early days of cable, each local franchise tended have their satellite downlink station so as NTL and BlueYonder each startted buying up local franchises, they laid large amounts of backbone fibre trunks to link them all. Same happened when Blueyonder "bought" NTL to form NTL:Telewest (who later paid a fee to trade as Virginmedia) LG have come into a mature market and bought what is effectively single national cable provider so the only real investment they can make to increase the value of VM is to cable up more customers.

        Neither NTL nor BY nor the merged behometh of NTL:Telewest spent much at all on expanding the customer facing network, not even new builds where it would cost next to nothing to install every house at build time.

  7. Jess

    The Brexit situation looks like it might be the worst possible.

    A hard Brexit with a long period of uncertainty while businesses are on hold because they are hoping for a soft Brexit.

    The way it looks like it is going at the moment is:

    1. Goods - Turkey style deal avoiding the need for a hard Irish Border.

    2. Services - WTO (All EU HQs and data centres will leave)

    3. Banking - They will pay a fee to retain passporting, probably not much reduced from our net current contribution.

    1. Charlie Clark Silver badge

      Re: The Brexit situation looks like it might be the worst possible.

      Can't see banking being retained but goods not. More likely to be the other way round (as in CETA).

      1. Jess

        Re: Can't see banking being retained but goods not.

        Sorry I don't think my post was clear.

        Turkey is part of the customs union, this means no duties between Turkey and the EU on goods.

        Mrs May made a promise that there would be no hard border between North and South Ireland.

        This is not possible with a complete withdrawal from the free market and the UK remaining intact and all having the same relationship with the EU.

        Ways it could be honoured:

        UK Remains in the EEA (Soft Brexit, Norway model)

        England and Wales leave the EEA, NI doesn't (presumably Scotland wouldn't either and the problem would then island hop, this would likely also involve the end of the EU).

        UK remains in the European Customs Union (like Turkey) this means the free market for goods which would benefit the EU (the oft quoted German cars), so there would be little incentive to the EU not to offer this model.

        (Of course EEA citizens would have to have the freedom to visit the UK otherwise borders control would be needed.)

        1. Charlie Clark Silver badge

          Re: Can't see banking being retained but goods not.

          Turkey is part of the customs union, this means no duties between Turkey and the EU on goods.

          Yes, but duties are now considered one of the smallest barriers to trade which is why we hear so much about "non-tariff barriers to trade"

          Norway is part of the single market but not part of the customs union (hint this is a bigger deal and much harder to get). There currently seems to be a lot of woolly and wishful thinking about the kind of the deal the UK can expect from the EU. To be clear, Article 50 was set up as a poison pill to make leaving the union as unpalatable as possible. It hands all the cards to the other member states and negotiations are done by the vast army of skilled trade negotiators that the European Commission has at its disposal.

          Unless the UK signs up to the single market then passporting for financial services is almost certain to b lost. Although it's extremely capital intensive, it's also much easier to move the offices and workers from London to Dublin, Amsterdam, Paris and Frankfurt than it is to move factories from Sunderland and Derby to Wcoclaw or Bratislava. If passporting goes then the City will almost certainly lose other business such as the nascent Yuan market to Hong Kong or Singapore.

          EEA membership is unlikely (Norway has indicated that it would veto it) and couldn't be split for Scotland and Northern Ireland. But we won't really know more before Article 50 is actually invoked.

  8. Anonymous Coward
    Anonymous Coward

    All the infrastructure investment we didn't do due to neoliberalism, we're blaming it all on Brexit now.

  9. Gordon Pryra

    Virgin Values?

    This made me spit coffee all over my keyboard

    "no concern for the Virgin values"

    These values seem to be the mis-selling of ALL their products to rip their customer off to the maximum they can.

    Even telewests support staff lied less than Virgins

  10. Anonymous Coward
    Anonymous Coward

    Costs rising?

    As Liberty Global is an American organisation, any investment of dollars by them in the UK is now much more effective in buying local labour and goods and imported material will be much same as previous.

    On the other hand, any crafty transfer pricing and the British-based upper management's calls for increased salary in compensation for their depleted buying power might be hit by deleterious exchange rate.

    1. Ralph Online

      Re: Costs rising?

      I would suspect that VM will be borrowing in £ in the city. [Indeed probably borrowing in the city to provide funds for other parts of LG - shipped though some Luxembourg type arrangement (?), and using interest payments made in the UK to offset/reduce their profits to zero - thereby paying no UK corporation tax.]

      But ultimately LG reports its financials in $, so these will be negatively impacted as will any dividends paid to US investors.

  11. W Donelson

    Not to mention the coming poverty of the nation

    Very sad situation.

  12. Dave 15 Silver badge

    And in other news

    Fred from the Cross Keys reckons Brexit could affect the chance of a sewage blockage at the Dog and Partridge down the road.

  13. Tubz
    WTF?

    Eh?

    You cannot say investment and Virgin Media/Liberty Global in the same breath, they are just incompatible !

  14. MarthaFarqhar

    There's been a capacity issues where I live since September 2015. Latest fix date is Feb 2017. They jumped the gun and predicted Brexit results way before the vote. Bravo VM.

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