Cable TV giant Virgin hooks up to new homes

Virgin Media is to expand its fibre-optic network after securing a deal with Persimmon Homes to bring cable to thousands of new properties.

The agreement follows similar deals between Britain's biggest cable operator and other leading housebuilders.

Under the deal, Persimmon's new homes will have built-in access to Virgin Media's broadband, television and landline telephone services from the day the occupants move in.

Steve Carlin, director of sales for new build at Virgin Media, said: "We have done this on a smaller scale before but for the past 18 months we've talked about making it a national play.

"It makes sense. It is cheaper and easier than digging up the roads."

Karen Glyn, commercial director at Persimmon, said fast broadband and entertainment systems were "at the heart" of modern homes.

Virgin is half-way through extending its cable network, which currently covers about half of the UK. The expansion will make Virgin services available to a further 500,000 households.

The company has tried different ways to extend its reach, which have included mounting cables on telegraph poles in Berkshire and Wales. It has identified more than one million homes across the country that could benefit from a similar approach.

Fibre-optic cables offer the fastest broadband speeds. Next month Virgin is launching a 100 megabit per second broadband service, which it claims will allow users to download a music album in as little as five seconds.

The group, which rebranded as Virgin Media in 2007, reported free cash flow (the amount after capital expenditure) of £119m in the third quarter, which was up 8 per cent year on year. Its subscriber base rose by 14,100 to 4.78 million.

BT is also investing in fibre-optics with its £2.5bn "Infinity" drive. It aims to bring superfast broadband to two-thirds of the country by 2015. Earlier this month, BT's boss, Ian Livingston, said it could expand its network to 90 per cent of homes if it secured government funding.

Virgin's deal with Persimmon comes a week after the National House Building Council said registrations to build new homes had risen by 11 per cent last month, to 10,028.

Imtiaz Farookhi, the chief executive of the NHBC, said: "We have been slightly surprised by the resilience of registration volumes, given the slow start to the year, although the volumes still remain at historically low levels."

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