Virgin Media mounts Wi-Fi challenge to BT with home-routers upgrade and street-side hotspots

VIRGIN Media is preparing a major expansion of its Wi-Fi network to mount as stronger challenge to BT as broadband and mobile services come together.

The cable operator, part of John Malone’s European group Liberty Global, is planning to install Wi-Fi hotspots in its street-side cabinets to provide subscribers with internet access outside the home at no extra charge.

Virgin is also preparing a major update to its home routers to allow customers to use each other’s wireless networks when they are in range. The change is expected to come with a free speed boost to encourage users to share their capacity, alongside assurances that the public network will be kept separate from their secure private connection.

The investments are designed to tackle BT’s Wi-Fi leadership. The former state monopoly offers broader Wi-Fi coverage than any of its rivals, with more than five million hotspots, most of them provided by shared capacity on home routers.

Better Wi-Fi coverage is also expected to reduce Virgin’s mobile costs, which will also challenge BT.

The Virgin Mobile network is based on capacity rented wholesale from the mobile operator EE, which BT is due to acquire for £12.5bn. By shifting more calls and internet traffic onto Wi-Fi, Virgin could reduce its bills.

Virgin is expected to announce details of its new Wi-Fi services over the next few weeks. Since Liberty Global took control of the operator two years ago, it has sharply cut costs and positioned it as the premium broadband operator in the market, able to offer higher download speeds via the cable network than BT, Sky and TalkTalk are able to using traditional copper telephone lines.

All Britain’s major telecoms operators are navigating a massive shift in the market towards offering bundles of fixed-line, mobile and television services.