Allowing competitors to access its cable network considered by Virgin Media

In a bold bid to head off possible regulatory intervention and increase revenues, Virgin Media has secretly drawn up plans to open up its cable network to rival broadband and telephone companies.

Companies that currently offer their services over the BT network could now be given an alternative, which could mean lower prices for broadband customers.

The company hopes to pre-empt pressure from regulators to allow its competitors to use Virgin Media’s fibre-optic network and at the same time improve its financial performance by charging rivals like Sky, Tiscali, Cable & Wireless and O2 to use its broadband infrastructure.

An analyst at a US Investment bank said: “Letting rivals use its wires for a fee makes commercial sense. And it could also keep the regulator off the company’s back.”

Competitors were allowed to use the areas of BT infrastructure that connected to homes five years ago when the authorities forced the telecoms provider to “local loop unbundle.”

BT’s Openreach subsidiary could be used as a template by Virgin Media, which is led by the New Zealand born Neil Berkett. With hundreds of “wholesale” customers with the division that was set up back in 2005.

With Berkett extending the reach of Virgin’s fibre-optic network to around 57 percent of the homes in the UK the 24 percent of the UK broadband market that Virgin currently holds could be set to rise.

In order to ensure that the market stays competitive Ofcom, the telecoms watchdog keeps a close eye on the market, although the idea that Virgin is engaged in anti-competitive behaviour has not been suggested. With a value of $2.53 billion (£1.69 billion) on the New York Nasdaq exchange, the cable company makes an annual payment of £8.5 million to Sir Richard Branson to use the Virgin brand name.

It is expected that Virgin will disclose a customer base of around 5.5 million when it reports its first quarter results this week, compared to 9 million customers that currently subscribe to Sky.