Liberty Global Investigating ‘Project Lightning’ Rollout Figures

Suspends four Virgin Media staffers amid probe into discovery that MSO may have overstated deployment progress
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Virgin Media, the U.K.-based MSO owned by Liberty Media, has launched an investigation over concerns that a handful of staffers may have overstated the deployment progress of Project Lightning, the operator’s ambitious network expansion project.

In an amended 8-K filing, Liberty Global noted that it originally reported that its European operations had added 1.4 million premises to its networks during 2016, including 465,000 premises added by Virgin Media.

Those added premises included 323,000 premises connected to networks in the U.K. and Ireland and 142,000 premises in many U.K. locations where the operator “understood construction to be essentially complete,” but still required elements such as power, headend capacity upgrades and other physical connection activities.

Those “inactive premises” were expected to become “connected premises” during Q1 2017. But in late February 2017, Liberty Global said it discovered that the construction work to connect a “substantial number of the Inactive Premises had not progressed as originally understood” and was ultimately misrepresented.

Connected to the review, the company said four Virgin Media employees have been suspended and removed from their posts and employment investigations are ongoing. “Pending the results of these investigations, disciplinary action may be taken against employees, including dismissal,” Liberty Global said.

And while most of the inactive premises did not meet the prescribed requirements for inclusion in that category at the end of 2016, Liberty Global now expects all of those inactive premises to be connected before June 30, 2017. Though that impacts the total number of premises that were able to connect to Virgin Media’s network during the first half of 2017, the company likewise doesn’t believe that any shortfall during this time will have any effect on the total number of premises that it expects to add tied to the overall Project Lightning program.

Amid this investigation, Liberty Global has appointed Robert Evans as managing director, Lightning, with full responsibly for the Project Lightning project. Evans is reporting jointly to Balan Nair, Liberty Global’s chief technology and innovation officer, and Tom Mockridge, Virgin Media’s CEO.

Additionally, Virgin Media has appointed a new Project Lightning management team, based on the ground in the U.K. that reports to Evans, who previously served as managing director, core network and operations.  

Dana Strong, the newly appointed president and COO of Virgin Media, is now responsible for delivering Project Lightning customer volumes and will lead the company’s Consumer division and report to Mockridge. She previously served as SVP and chief transformation officer of Liberty Global.

Liberty Global also said it will no longer include Inactive Premises in the Added Premises figures that it reports in future periods tied to Project Lightning and our other network extension programs.

“Notwithstanding the change in methodology, we continue to believe that our Active Customer Penetration for our Project Lightning build will reach approximately 40% three years after the premises are available to be marketed,” the company said.

Under its revised estimates, the company now expects to add 1.3 million to 1.4 million new premises to its European networks in 2017, including 700,000 to 800,000 premises pursuant to Project Lightning.

Among other exec moves, Jeff Dodds has rejoined Virgin Media in the new role of managing director, mobile, and Peter Kelly, managing director of Virgin Media Business, will take on responsibility for a larger Business unit that now includes Business Customer Operations (BCO).

Separately, Gregor McNeil who is currently managing director of consumer at Virgin Media, has been appointed CFO at Cable & Wireless, Liberty Global’s sister company in the Caribbean.