Virgin Media 2007 Annual Report Download - page 31

Virgin 1, where we pay an annual royalty of 0.5% of revenues received by Virgin 1, subject to a
minimum of £100,000. As part of the agreement, we have the right to adopt, and have adopted, a
company name for our parent, Virgin Media Inc., over which, together with the name ‘‘Virgin Media’’,
we retain worldwide exclusivity.
Employees
As of December 31, 2007, we had 15,060 employees, of whom 13,319 were permanent, and 1,741
were temporary or contract. Approximately 1,800 Service Operations, Network Operations, Design &
Civils and Business Field Operations employees are covered by two recognition agreements with the
Communication Workers Union, or CWU, and the Broadcasting, Entertainment, Cinematograph and
Theatre Union, or BECTU. Both of these agreements are terminable by either the Union or us with
three months’ written notice. Except for the CWU arrangements, no other employees are covered by
collective bargaining agreements. We believe that our relationship with the CWU, BECTU and our
employees is generally good.
Our strategy is to become an employer of choice within our U.K. marketplace and therefore
continue to build a well trained and motivated workforce. We are working on a number of initiatives to
ensure that we build this into the way we work and have established specific milestones over the next
18 months. These initiatives range from embedding a consistent performance management process
across the whole organization by setting clear annual objectives (both business and personal),
establishing incentive-based awards, through to the ongoing refurbishment and improvement of the
working environment. A number of other engagement initiatives are ongoing including employee
satisfaction surveys and action plans, a recognition scheme, brand/culture training, and local charity and
community activities.
Item 1A. Risk Factors
Our business, financial condition or results of operations could be materially adversely affected by any
of the risks and uncertainties described below. Additional risks not presently known to us, or that we
currently deem immaterial, may also impair our business.
Risks Relating to Our Business and Industry
We are subject to significant competition.
The level of competition is intense in each of the markets in which we compete, and we expect
competition to increase. In particular, we compete with BT, BSkyB, Carphone Warehouse (Talk Talk),
Tiscali, Vodafone, O2, Orange and T-Mobile, each of whom has significant operational scale, resources
and national distribution capacity. We also compete with numerous internet service providers and
indirect telephone access operators that offer telephone, broadband and dial-up internet services over
BT’s network. We will face increasing competition from mobile telephone network providers and new
market entrants, including those providing VoIP and IPTV. The increase in competition will be
compounded by technological changes and business consolidation, which may permit more competitors
to offer the ‘‘triple-play’’ of digital television, fixed line telephone and broadband services, or
‘‘quad-play’’ bundles including mobile telephone services.
In the digital television market, we compete primarily with BSkyB in providing digital pay
television services. Competition increased as a result of the launch of Freeview in October 2002, which
provides over 40 digital terrestrial TV channels on a free-to-air basis to consumers who have purchased
a Freeview digital set-top box or digital television recorder. In March 2004, Top Up TV launched a pay
television service offering approximately 120 programs from 19 channels for a fixed fee to subscribers
who otherwise receive Freeview and have purchased a Top Up TV set-top box. BT launched a personal
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