Virgin Media 2008 Annual Report Download - page 16

Virgin Mobile offers a broad range of mobile communications products and services, such as
mobile voice and non-voice services (including SMS, picture messaging and entertainment services, such
as games, news and music services) delivered over 2G, 2.5G and 3G platforms. Virgin Mobile’s network
partner is T-Mobile, and Virgin Mobile has a network supply agreement with T-Mobile for a minimum
10-year term from January 2004. In June 2008, we agreed new terms with T-Mobile which reduced the
wholesale rates we pay for voice and SMS traffic, retroactive to January 1, 2008. We also agreed new
data pricing rates, retroactive to April 1, 2008, which will facilitate more competitive pricing in the
growing mobile data usage market and enable us to enhance our mobile entertainment, web browsing,
communications and social networking features. We have also committed to purchasing our current
core voice, text and handset data and mobile broadband data card services exclusively from T-Mobile
for a three year period commencing April 1, 2008. In addition, in October 2008, we launched a mobile
broadband product which complements our fixed broadband offering.
Consumer and Mobile Sales and Marketing
We use a variety of sales channels to sell our broadband, television, and fixed line and mobile
phone services to consumers, including telesales, customer care centers, online and retail channels. In
September 2008, we also began offering our products through an outsourced telesales partner located
in the Philippines. As of December 31, 2008, our retail channels included 23 of our own Virgin Media
branded stores, which offer a complete range of our consumer products. We also offer primarily our
mobile products through approximately 5,000 third party sales outlets in the U.K., including
approximately 1,300 specialist outlets of our distribution partners such as Carphone Warehouse,
Phones 4U and Zavvi (formerly Virgin Megastores). In December 2008, Zavvi announced it had
entered into administration proceedings and intends to wind up its operations. We are actively pursuing
agreements with additional distribution partners and intend to significantly expand our portfolio of
owned stores in 2009, with the opening of additional Virgin Media branded stores and the introduction
of Virgin Media branded shopping center kiosks.
These sales channels are supported by direct marketing initiatives and national and regional
television and press advertising. We use our residential customer database to identify the profiles of our
customers so that we can design offers to match their needs. Our offers encourage customers to
purchase new services, upgrade their existing services and cross-sell products across our portfolio. Our
marketing balances acquisition marketing, or prospects, and customer marketing to ensure we optimize
growth from new and existing customers.
Consumer and Mobile Customer Service
Service calls for our consumer cable customers and our mobile customers are handled through a
combination of in-house call centers and outsource partners. As of December 31, 2008, our in-house
consumer cable call centers located in the U.K. employed approximately 2,600 call center staff. We also
had additional outsourced consumer cable call centers both in the U.K. and in India. Our mobile
customer service calls are principally handled in-house through a U.K. call center. As of December 31,
2008, we employed approximately 750 call center staff for our mobile business. We also have additional
outsourced mobile customer call centers in the U.K. and South Africa.
Content Segment
Virgin Media TV and sit-up provide basic (i.e., non-premium) television channels and related
services to the U.K. multi-channel broadcasting market (including to our Cable segment) and a wide
variety of consumer products by means of sit-up’s auction-based shopping channels.
As of December 31, 2008, Virgin Media TV had eight genre-based entertainment channels,
including Virgin1, Living, Bravo, Trouble, Challenge and Challenge Jackpot, and additional time-shifted
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