On the face of it, the prospective NTL / Virgin Mobile deal sounds pretty good. It hits most of the sweet spots of the much-hype "quadruple play" offer, and certainly a fair amount of commentary seems to suggest this is the end game.
I've been a big believer in the upsides of the "broadband operator + MVNO" model for a while - not much legacy PSTN to worry about, someone else deals with the nasty complicated radio bit of the cellular service, and so you, the operator, can optimise least-cost routing and clever IP-based services to your heart's content. You don't have to be over-focused about shoe-horning traffic over a cellular network, just to fill up your available capacity that you've got with your expensive spectrum licence and network build-out. And at the same time, you have a nice shiny new IP network, modern and flexible IP billing system & (hopefully) a customer service function that doesn't get scared by words like "firewall" or "PC".
In theory, combining fast IP pipes and resold & well-branded cellular should be a match made in heaven for a service based on dual-mode cellular/WiFi phones, for example. And, unlike an operator such as BT with Fusion, Virgin comes with a big existing mobile customer base.
However, there are a couple of flies in the ointment. For anyone out there doing their due diligence on this deal, you might want to consider the following:
First, most MVNOs (especially in Europe) have an overwhelming proportion of pre-pay customers. Many will be young people who use someone else's broadband & whose parents / flatmates / university residence halls' managers may be unwilling to change to benefit someone else's bundled quad-play
Secondly, many of the favoured approaches to dual-mode services - not just UMA (which regular readers will know I tend to criticise anyway) but many SIP-based alternatives too - need boxes to be integrated fairly tightly into existing cellular networks. These usually require direct access to elements in the cellular core such as MSCs (switches) and HLRs (home location registers - essentially the database that tells the network where you are). My understanding is the most MVNOs' deals don't give full access to these network elements, and that "technically deeper" MVNO deals like BT/Vodafone are relatively unusual in this regard. I don't know what the precise network-side ins & outs of Virgin's MVNO set-up are..... but I'd advise any M&A guys to take a close look at things like "Access to the 'A' Interface" before putting up any persuasive Powerpoint slides featuring WiFi/cellular handsets & (yawn) "Seamless Roaming".
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