Virgin Media, the UK cable provider, announced that it will provide a free set-top Freeview digital terrestrial set-top box to its customers in areas where it does not provide cable service. Customers that subscribe to its 8 Mbps broadband service and Talk Anytime phone bundle at 19.99 UK pounds per month will get the set-top box for free. Customers in these non-cable areas taking only a broadband will pay 40 UK pounds for the set-top box. The company plans to offer more advanced TV services in 2008.
This is a clear response to BT Vision IPTV service. Virgin is trying to retain its broadband customers from moving to BT Vision in the face of BT's offer of a free Freeview set-top box. Virgin is also using this offer to move people to its voice/data bundle.
BT Vision will start providing a rich set of on demand services starting before spring ends. This will make it difficult for Virgin to compete until its own on demand services come up to speed. On the other hand, BT cannot afford a slow rollout. Virgin (and others) will be breathing down its neck.
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