The rumoured plans of telecoms giant Virgin Media to build a Wi-Fi network in London have been confirmed by the company's CEO, Neil Berkett, who said that the company was in "advanced conversations” with boroughs and councils in the capital.

According to Broadband TV News, one proposition would be a blanket minimum free Wi-Fi access for everyone living in those areas at 500kbps with Virgin Media customers getting 10 Mbps.

The other option - one which we mentioned back in November 2010 - would be for Virgin Media to wholesale the offer by installing its own wireless broadband routers and allow Virgin Media to sell extra "space network capacity" that arises when its customers are not surfing from home.

There are at least four very compelling reasons why Virgin Media may consider adding Wi-Fi to its product roster. Firstly, it allows the company to compete on an equal footing with BT which offers Openzone Wi-Fi hotspots.

Secondly, it offers Virgin Media customers a compelling reason to stick with the company and may help to reduce churn in the long run, thirdly, Virgin Media may use this service to allow users to benefit from stronger signals where its MVNO network is weak and finally, it will provide Virgin Media with a brand new marketing channel.