Virgin Media 2006 Annual Report Download - page 21

Competition
Cable Segment
Consumer
We believe that we have a competitive advantage in the U.K. residential market because we offer a wide range of integrated
communications services, including high−speed broadband internet, fixed line and mobile telephone and television services. We offer
most of our products on a stand alone basis or as part of bundled packages designed to encourage customers to subscribe to multiple
services. We offer internet and telephone services nationally and currently offer television services in our service areas only.
Competition in each of these services individually is significant and some of the other service providers have substantially greater
resources than us.
In 2006, competition in all of our Consumer product areas increased substantially, primarily as our competitors looked to expand
their own product offerings into bundled propositions. Key developments amongst our primary competitors included:
• BT Group plc. BT Retail launched its BT Fusion and BT Vision products in 2006, adding mobile and television bundles. BT
Fusion offers a dual−mode mobile/WiFi handset that allows a user to make Voice over Internet Protocol, or VoIP−based calls
via WiFi in the home on a handset which can also make traditional mobile calls outside the home. BT Vision offers a Freeview
plus an IP−based pay television service, although the service has limited content.
• British Sky Broadcasting Group plc. BSkyB, a long−time competitor in the pay television market, launched a broadband and
fixed line telephone service in 2006, with television and broadband bundles. In late 2005, BSkyB acquired Easynet, an internet
service provider.
• Carphone Warehouse Group plc. Carphone Warehouse resells mobile phone services (including Virgin Mobile) via its own
retail distribution channels and offers fixed line telephone and broadband services under its TalkTalk brand. In 2006, Carphone
Warehouse acquired the AOL UK ISP business, which is being merged with its existing TalkTalk business.
• Tiscali S.p.A. Tiscali offers fixed line telephone and broadband services and, in 2006, Tiscali acquired Video Networks
Limited (HomeChoice), which provides IP−based television, fixed line telephone and broadband in the London area.
• Orange. Orange offers a triple play of mobile phone, fixed line phone and broadband services. The fixed line telephone and
broadband services were previously marketed under the brand name Wanadoo, which was rebranded to Orange in 2006.
• Pipex Communications plc. Pipex acquired several smaller retail broadband and telephone ISPs in 2006, including Bulldog
from Cable & Wireless, Toucan and Homecall.
• Vodafone and O2. Both announced plans to launch their own fixed line broadband and phone services in 2007. In 2006, O2
purchased Be, a broadband provider in the U.K.
Cable Television
We compete primarily with BSkyB in providing pay DTV to residential customers in the U.K. BSkyB is the only U.K.
pay−satellite television platform in the U.K. and has high market share of the U.K. pay television market. BSkyB owns the U.K. rights
to various sports and movie programming content which it has used to create some of the most popular premium pay TV channels in
the U.K. BSkyB is therefore both our principal competitor in the pay television market, and an important supplier of television content
to us. The Office of Fair Trading, a U.K. regulatory agency which we refer to as the OFT, has previously determined that BSkyB is
dominant in the wholesale supply of channels carrying certain premium sports content and premium movies. Subject to a continuing
finding of dominance, European and U.K.
17
Source: VIRGIN MEDIA INVESTM, 10−K, March 01, 2007