Virgin Media's business division is to supply a managed fibre optic network to London's Grid for Learning that will replace a broadband network currently supplied by Symmetrix, a Capita company.
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The five-year deal requires Virgin Media to build a fibre network to link all 33 London boroughs, more than 2,500 schools, 100,000 schools' staff and over one million pupils at speeds from 10Mbps to 10Gbps.
This network and the accompanying framework purchase agreement is expected to form the kernel of a London-wide public service network, fulfilling a government objective to make better use of existing infrastructure through sharing resources.
London's Grid for Learning (LGfL) CEO Brian Durrant said the Symmetrix contract was due to end in June 2012, and his directors had decided they didn't want to own or maintain physical assets. "We also though it was time (after 10 years) to open up the network to competitive bidding," he said.
The decision was prompted by the loss of London's £24m share of the government's £200m grant to fund schools' take-up of computers and broadband. Brian Durrant said the shared grid had saved local councils around £300m over the past three years.
Durrant said there was no longer any need to sell teachers on IT. "A quiet revolution has taken place," he said. "Now they panic if their interactive whiteboards are not online."
LGfL was the first public sector body to base its purchase on the joint academic network (Janet) purchasing framework, cutting procurement to just six weeks, he said.
From April 2011 primary schools will start having access to 10Mbps links for less than the price they now pay for a one megabit link, and high schools will pay less than one-third of the price of a 100Mbps service for a 1Gbps link. LGfL will also get rid of an annual £1.8m maintenance fee, Durrant said.
VM Business MD Mark Heraghty said the pricing for the schools was possible because VM's present fibre network, built to provide its residential customers with video and broadband, was under-used during the day. He was also expecting to pick up extra traffic from other local authority departments such as health, police and emergency services.
Mark Heraghty said VM currently had 186,000km of fibre across the UK, serving hundreds of municipalities and other public services. "We now have the third-biggest B2B network in the UK," he said.