Virgin Media investment plans

Over the weekend Virgin Media revealed it's latest investment plans to The Telegraph. It is seeking to expand it's network asking Liberty Global to increase it's investment to grow the footprint of it's Fibre network a £3bn plan to grow from 50% of households covered to almost 66%.   

Given that interest rates are at all time lows and Virgin have said that the investment has a good return in growing the customers base in areas where they are new entrants rather than established provider why are they not seeking to be aggressive and double the investment? The reports on broadband coverage in Britain say that the costs are not commercial for just the last 10% of households and so the capacity is there to almost double what Virgin already has. 

We could say that Liberty Global is being cautious given the uncertainty around Brexit and its economic impact or as a Global player the upside of investment outside of the UK is greater than inside.  One option would be for Virgin to become more of a player within the Business market which its brand does not speak to other than in the small business sector, some players are realising that BT is providing a very poor quality service.   

Is Virgin gaming the market to such an extent that it knows that investment is infrastructure is like betting on England's football team? It needs to stay in the game and the cost of new customers is lower in areas that it is an entrant to rather than established in that they are likely to buy a bundled service bigger than that established customers.

Handset upgrade time. Be careful out there!

For the past two weeks I have been fighting with my new Smartphone.  My HTC One was over two years old and so I was "eligible" for an upgrade, I visited a store just off Oxford Street hopeful that I might pick up the latest HTC One.

The first problem was that they didn't have any in store, if I came back in two days I could have one.  "They are very popular you know," I was told by the girl who was born after I started working in the mobile industry. I was also going to have to pay something up front, something I have never done.  As a mobile network I would say that EE is overstocked as she then tried to sell me on an iPhone with a pitch that even Phones-4-You would have found aggressive at it's peek.

I looked at the Huawei P9 on the stand all shinny and new and unlike any of the others in I could have it for the same monthly tariff I was on and NO money up front.  The Sales Assistant then gave me another sales pitch telling me that this phone had the BEST camera as it was a Leica and I would not be disappointed if I went for this model.

I thought that what could be that different between the Huawei and the HTC they were both running the latest Android software and the last few months I've been using it on the old handset. It came with twice the capacity in terms of memory and whilst it was not using Qualcomm's chips it much of an impairment was it going to be day to day? So I said yes I'll take one for the next two years.

The box I was handed spoke of higher quality that the one my last phone turned up in. The slimline handset looked good as a SIM card was inserted. But a few things seemed to be missing in the box, not protective case or film for the screen but hey I can buy those online.  I had to dash for a meeting and so didn't have time to unbox everything and so left the shop.

After my meeting I turned on the Huawei and the UI was something of a surprised in looked liked a device from 2012.  The icons of Apps that I reinstalled from the Google Store were displaying retro logo, were they also outdated in terms of functionality?  I attempted to look through the menu to find a transfer tool that would allow me to copy over some/all of my personal data from the HTC alas no joy! This was something that I had on my Nokia before 3G surely the engineers at Huawei realised that consumers expected some assistance moving to a new handset.  It takes a long time to rekey all the things that are important and it's hard to remember passwords that you've not had to use for two years plus.

Back home and with time and space to complete looking at what was in the box and more surprises! The first thing that strikes me is that the cable in order to fit in the small package is half the length of what I used to and rather than a microUSB it is the new Micro Fitting. the distance from the power socket to my desk is further than the cable so until I can but a 2M replacement the phone lies on the floor whilst it charges!

Next we have the headset it looks like something I would pick up a Petrol Station for under £5 to replace a lost one no something I'd associate with a Premium Handset.

The Huawei P9 is so new that third parties are yet to produce any accessories and so finding a decent case is proving an issue the first two bought on line have been returned because the didn't look like it did on line.

The first weekend of "testing" the Huawei was an education.  Standing at the Tube station I logged on to the Virgin Media Hotspot and thought that I was set for the day.  But unlike my HTC the Huawei does not scan and login in as we pull into each station rather you have to manual scan, select and connect or just scan. This process becomes a test between the train driver and myself as to speed to move on.

Having taken a few snaps with the "BEST Camera" on the market I grab a coffee and start to edit them using my favourite Apps and after 10 minutes I become aware that when Winter comes I'm not going to need gloves as the phone is now "warm" I don't want to see how soon it becomes hot!  This weekend I tested out the panoramic function and it failed to stitch the image cleaning five times out of five regardless of speed at which I pan the camera. With the HTC I have about five failures in two years and I take a lot of photos.  The next issue with the Leica enabled Huawei is that the angle of view is less than that of the HTC and so I now have to stand back to get the same view I've become used to.  Then I posted the edited pictures on to Flickr and Instagram to see the difference between phones old and new.  The Huawei does not record itself as a P9 on Flickr rather it is a "HUAWEI EVA-L09"  so much for Brand Management helping to grow sales.

How much memory does your phone have?  Well despite claims I have less free space on my P9 than I had on my HTC, yet it's supposed to have twice the capacity and I have installed less Apps and the phone has no bloatware installed by my Mobile Network.

What can I say that is positive about the P9 well the battery is excellent on the basis that I am getting two days use between charges.  BUT that is because the user experience is so poor that I am using it less than I did my HTC.

What have I discovered from the whole sorry experience?  The idiots that review new handsets are not journalists, they conduct a few simple tests rather than actively use handset and then sell the device or returning it to the PR company they are sitting in front of.  The margins within Consumer contracts are so slim that Mobile Networks no longer have any interest in Customer Service and so if you make a mistake with your handset choice you have to live with a lemon for two years. Huawei are a VERY long way from being able to compete with Sony let alone Apple, HTC and Samsung when it comes to PREMIUM handsets.  Google does not give much assistance to Handset manufacturers and care even less about consistent  user experience.

I am still looking for a 2M cable, quality leather case and headset to use with the P9, if you have any recommendations then please leave a comment. If you are in the market for a new handset give Huawei a few years to improve before picking one up.

Ofcom BT proposal is a fudge rather than regulation that UK will need following the EU referendum

Whilst having breakfast today Ofcom published it proposal for BT Openreach following the year long review of how structural separation is servicing the market a decade after it's creation. Ofcom's Chief Executive Sharon White spoke on BBC Radio 4's Today programme to explain what the thinking was on fixing the failed provision of broadband and the fastest way to to turn things around. Her key message was that spinning out Openreach was too complex and would take too long and so forcing BT to create an independent Chair and improved reporting was going to allow changes to take place faster.

BT didn't seem to have any problems splitting Cellnet out and thus should not have issues with Openreach.  The problem this time is the state of the Pension scheme and complex contracts.

After White had left the radio studio her place was taken by BT's CEO and his opposite number at Talk Talk to have their say on the proposal. As could be expected Dido Harding was disappointed that Ofcom did not take a harder line. Gavin Patterson's response could have been a comedy routine at the BT managers away day, his best line was, "BT does not game Ofcom".

Over the past ten years BT has spent £10Bn investing in Broadband Services and in an effort to hold off break up offered to spend £6Bn in the next three years.  Too often consumers and businesses in Britain are complaining that the current infrastructure is woeful and the offer to double spending in the next three years is not going to raise satisfaction.

The 2010 spending review by George Osborne resulted in budgets cuts to Ofcom which means that a review that should have been completed in 12 months will take over two years.  BT and its rivals all have more lawyers and economists than Ofcom and are capable of gaming the regulatory processes.

Some on Twitter seem to think that this is another victory for BT 

yes, it is BT 1: Ofcom 0. Conduct regulation has failed, and this is just more failure. @AnnRobinson8

— John Fingleton (@JohnFingleton1) July 26, 2016

John Singleton is the former head of the OFT and he seems underwhelmed by the proposals.

If we want better infrastructure for broadband then it's best served by Openreach becoming a business in its own right and being able to raise capital on its own behalf rather than competition for budget with other BT subsidiaries and group commitments such as Pensions which at the moment is £12Bn in debt. Theresa May's new Industrial strategy hopefully will see the Government reject the proposal and seek BT's break up.

So just how many Mobile Networks does a country like Britain need?

Today the Competition and Markets Authority published a letter to the European Commissioner calling for the merger of Three and O2 to be blocked to protect the consumer. I had to check that it was not written ten days ago, the current government believes in the Free Market and the market has shown that the UK is not large enough to support five and now four network owners.

If the CMA wanted to protect the consumer then was BT allowed to buy EE and why was it not forced to spin out Openreach?

The role of Ofcom should be to provide assurance that the market for Mobile Infrastructure is not manipulated by the players in the market and that they are fulfilling the terms of licences granted via spectrum sales by Government.  The failure is not that Overseas Investors can no longer justify investment in an extremely competitive market but rather Regulators are under resourced and qualified.  The 2010 spending review by George Osborne and subsequent budgets has seen the money available to manage Ofcom fall and the remit rise this means that a regulator that had been struggling now is not fit for purpose.  Rather than resource the service correctly we have a Government that is taking others to undertake the role for it.

The second generation of mobile expansion saw just four networks build the industry at the fastest pace, with innovative product launches which the CMA now feels is a risk to the consumer! Alongside the network owners we also have a number of MVNOs that offer services to customers at a range of prices.  We might have fewer retail options on the high street with the demise of a number of independent retailers for the time of mass adoption of mobile but we are unlikely too see price rises as a result of Three buying O2.

I hope that the European Regulator has far more economists than the CMA and Ofcom and realises that the UK consumer is not able to fund adequately four mobile network operators.      

What do we do about O2?

Over the last few days the FT has focused on the potential for regulators to stop the disposal of O2 in the UK by Telefonica. They are now saying that the UK must not drop to just three networks but the market requires four.

This is such a simple belief in competition that you have to ask how much time have they invested understanding why two of the four incumbents courted BT when they signalled a wish to return to the mobile sector?  When former state owned players cannot make the numbers work to operate in one of the largest economies in the world then the market has failed!

The current level of competition means that at a consumer level the numbers are marginal.  The Infrastructure requirements to roll out 4G makes the market subprime. Rather than opt out of regulation Ofcom should seek to acknowledge that the solutions required needs them to take decisive action to improve the cost base whilst raising the quality of the networks.

If the Infrastructure can be improved and better wholesale terms can be achieved then at a retail level we might se more competition.  Over the past 15 years we have seen a decline in the number of retailers offering consumers mobiles as Independent players have gone to the wall and Networks have closed a number of there stores.  The exit of Tesco from the MVNO space can be seen as a warning flag that the consumer might have won on price but has lost on quality.

I would allow Three to buy O2 on the basis that Telefonica is current in a debt reduction cycle rather than investment mode, thus all the while it holds the UK asset it under invests meaning that it falls behind it competitors.  Without Three buying O2 the business would face a slow death.  Once we have consolidated the market to three players we require Ofcom to invest in staff with a deep knowledge of Mobile who are prepared to take action before breakfast, before lunch and after dinner to borrow a phrase from Michael Heseltine. At the dawn of Mobile thirty years ago we had a duopoly that was regulated in such a way that consumers had choice and a number of people became MultiMillionaires serving the consumer.

Think outside the box

Conversations since the return to work seem to focus on the presumption that the answer is Apps when it comes to mobile.

I fear that those I am speaking to are extremely short sited and need them to starting thinking about the end of the current smartphone OS ecosystems.  I think that more individuals are removing Apps from devices than adding them and too many new apps are clones rather than innovative. As 4G coverages becomes more widespread we have an opportunity to change the current power structures.  But this is only possible if those in the Mobile space change their mindset.