Virgin Media shares jumped more than 5 per cent after it said it was doubling broadband speeds for most of its four million customers.
Subscribers with connection of 50Mbps or less will see their broadband speed double as Virgin tries to fight off competition from rivals such as BT, Sky and TalkTalk.
Virgin claimed the upgrade, which should be completed by 2013, could boost UK growth – and Prime Minister, David Cameron, welcomed the move.
Analysts said it would cost Virgin about £150m and looked partly defensive as it tried to retain its large customer base on slower packages.
Enders Analysis said it was hard to gauge the overall impact as arch-rival BT prepared to roll out its "next generation access" fibre-optic service.
The shares rose 77p to 1545p.