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Virgin Media: A case of the hare and the turtle?

Posted by Todd Mersch on 11 July 2017

In the UK, the broadband arms race to be the best, the fastest or the quickest internet provider is well-known. So, when Virgin Media recently announced that its 100 Mbps service is now standard in the UK, it was probably to the annoyance of the other big three service providers.

But while the news of faster speeds will be good news for some customers across the UK, the roll-out from Virgin may not be all it seems. Why? Because one, increasingly fundamental piece of the puzzle is missing. What do these speeds mean for connecting the rest of the home via Wi-Fi?

Suddenly, the promise of 100Mbps becomes less lucrative.

It could be argued that the new standard speed means consumers will be less reliant on Wi-Fi. But  not only is Wi-Fi expected to account for 59% of total Internet traffic in 2020[1], more devices are being built with Wi-Fi connections, there are more use cases for Wi-Fi, and combined with the difficulty in retrofitting homes with wired connections,  there is no sign of Wi-Fi use slowing down.

So where does that leave customers? While Virgin’s new speeds are no doubt great for TV services, let’s not forget that there is still a huge appetite for TV and video on a Wi-Fi connection. In fact, more video is consumed in the bedroom than any other two rooms combined – and 10% of Wi-Fi video is actually consumed in the bathroom!

There’s also the rise of the internet of things and advent of the smart home to consider. From smart kettles, home surveillance and security systems, to devices like Amazon’s Echo, households will soon have more connected devices than ever before. Personally, my Wi-Fi network already supports 18 different devices – and growing!

This increasing demand and reliance, means a strong Wi-Fi connection is going to be just as critical to consumers as gas and electricity. There is very little point in asking Alexa to add milk to the shopping list, if your Wi-Fi connection isn’t strong enough in the kitchen to make note of your request. Wi-Fi based security mechanisms (like a camera, or a doorbell) again, are only going to be as useful as the connection.

While Virgin is intent on winning the fixed broadband race, it seems that ISPs are falling short when it comes to the Wi-Fi offering. Our own research shows that 80% of consumers have at least some issues with their Wi-Fi, with a third experiencing frequent problems. In fact, ensuring that a good Wi-Fi connection is maintained is a service that consumers are even willing to pay for. It’s an opportunity that we found could be worth a staggering $6.7 billion per year for ISPs!

Is this a case of the hare and the turtle? Are ISPs so intent to cross the finish line, that they are forgetting about the factors that are important to the consumer?

When it comes to Wi-Fi, there are a few reasons why ISPs are falling short. To date, it seems that most have been focused on capacity. Whether that has been following the standards curve (and now upgrading to 802.11ac wave 2), or leveraging more advanced or ‘smart’ antenna technology, the efforts have been focused on increasing speeds and the ability to handle more devices. Essentially, buying the next big router from their CPE vendors.

While keeping pace with the standards curve is necessary, it certainly is not sufficient. There remains a hole in tackling service assurance for the Wi-Fi network. Firstly, there is a lack of intelligence to deal with the interference and congestion caused by the increasing use of Wi-Fi. The second is a lack of smart coverage solutions, which bring signal to every corner of the home and ensure every device is connected to the best access point. Finally, there is a lack of actively monitoring, managing and proactively solving issues on the network, to ensure Wi-Fi is always working as best as possible.

There is no doubt that faster internet speeds are desired by consumers – but broadband is only part of the battle. If service providers do not seek to properly manage Wi-Fi services, even the most hopeful of intentions behind initiatives, such as that of Virgin’s 100Mbps roll-out, will fall on deaf ears.  You can have as much “speed” the modem, but like the hare, it’s not everything. Speed is rendered pointless if the Wi-Fi doesn’t deliver.

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