Super slow start to super fast web plan

Virgin falls short in bid to connect 800,000 homes

A £3BN plan to give super-fast broadband to 800,000 homes is around 571,000 short of hitting its target after being blighted by disputes with councils and management problems.

Virgin Media said it connected 127,000 premises in the second quarter, up from 102,000 in the first quarter, for its Project Lightning initiative, which aims to give more properties fast internet.

But this has left it 571,000 short of the 800,000 homes bosses previously said they wanted to connect this year. So far the project has connected about 800,000 premises out of four million the company wants to reach by 2019.

The scheme is seen as the key plank of its UK expansion plans and a challenge to rivals who rely on BT-owned Openreach’s infrastructure. However, it was dealt a blow earlier this year when executives revealed they had overreported the number of homes connected by nearly 150,000. Four staff were suspended and have since left, a spokesman confirmed yesterday, and a new management team has been parachuted in.

It was an embarrassment for Mike Fries, the jet-setting chief executive of Virgin Media’s parent, Liberty Global, who told analysts the rollout was ‘going great’ just months previously.

Yesterday the 54- year- old claimed the project was ramping up again but declined to make predictions about its future performance. He told analysts: ‘We’re not going to give a quarter-by-quarter forecast of what will happen, except to say that we want to keep pace and the opportunity continues to look really good.’

Rob Evans, managing director of the Lightning project since April, now reports to bosses at Liberty as well as Virgin Media chief executive Tom Mockridge, who said joint management of the scheme was working well.

Problems with the Lightning rollout have also come from other sources. The company has become embroiled in rows with local authorities in the UK about the permission it needs to install its fibre broadband cables.

Liverpool City Council banned it from carrying out work earlier this year after a contractor working for the company was accused of damaging pavements near its construction site.

The issue has since been resolved but it is understood the firm has had similar disputes with other councils and private landowners. Virgin Media said the firm had bolstered its negotiating teams in response.

Elsewhere, there was good news for the company. It had its best ever quarter for television, adding 33,000 new customers – compared to a loss of 17,000 in the same period a year ago.

It also added 31,000 extra broadband customers.