Virgin Media 2008 Annual Report Download - page 17

or ‘‘multiplexed’’ channels which have identical content to other channels within Virgin Media TV’s
portfolio but which are broadcast one hour later. Virgin Media also owns a 50% interest in the
companies that comprise the UKTV Group, a series of joint ventures with BBC Worldwide. Together,
Virgin Media TV and the UKTV Group are the largest supplier of basic pay channels to the U.K. pay
television market. UKTV has ten channels, including G.O.L.D. and Dave, as well as associated
multiplexed channels. Together with our joint venture partner Setanta Sports Holdings Limited, we also
offer Setanta Sports News, a sports news channel available to all of our DTV customers, at no
additional cost.
Depending upon the distribution agreement with the platform operator and the package chosen by
the customer, the Virgin Media TV channels, sit-up channels, UKTV channels and Setanta Sports
News channel are available via a number of platforms, including our own analog and digital platforms
and the satellite digital platform. The Virgin Media TV channels, UKTV channels and Setanta Sports
News channel generate revenue by the sale of airtime and sponsorship to advertisers and advertising
agencies handled by Virgin Media TV’s wholly-owned advertising sales subsidiary, Interactive Digital
Sales Limited, or IDS. Most channels also generate distribution revenue based on either the number of
customers subscribing to programming packages carried by the relevant platform operators or a fixed
monthly fee. Virgin Media TV, sit-up and UKTV are also represented on Freeview, a U.K. free-to-air
digital television service, with UKTV History, Dave and Virgin1 available to Freeview viewers as well as
subscribers to all multi-channel platforms.
As of December 31, 2008, sit-up provided a wide variety of consumer products through three
interactive auction-based television channels: price-drop tv, bid tv and speed auction tv. These channels
are available on our own digital platforms, satellite, and also on the internet. Bid tv is also available on
Freeview. On January 6, 2009, sit-up ceased broadcasting price-drop tv on Freeview after the auction
for the renewal of that Freeview license was won by a third party. sit-up has also been negatively
affected by the recent decrease in consumer spending in the U.K., among other factors. Management is
reviewing the implications of these and other developments on sit-up’s business model.
Our Network
Our deep fiber access network has enabled us to take a leading position in the roll-out of next
generation broadband access technologies in the U.K. During 2008, we further invested in our cable
network with the deployment of the next generation of wideband cable broadband technology, which
significantly increased both upstream and downstream transmissions speeds, enabling us to
accommodate speeds of up to 200Mb per second. This technology enables us to offer high-speed
broadband services of 50Mb and higher and provides a platform for incremental upgrades in line with
consumer demand. Our investment in the next generation broadband access technologies is the latest in
a series of significant infrastructure investments to support our position at the forefront of
communication and entertainment services in the U.K. In 2009, we expect to complete the roll-out of
wideband cable broadband technology, allowing 50Mb service to be made available to over 96% of our
network.
Our cable network in the U.K. currently passes approximately 12.6 million homes in our regional
service areas as well as passing a significant number of businesses in these areas. The network utilizes a
combination of optical fiber and coaxial cable, and has an overall length of approximately 202,000
kilometers. This includes over 192,000 kilometers which are owned and operated by us and
approximately 10,000 kilometers of optical fiber and coaxial cable routes which are leased from other
network owners. Over 156 switches direct telephone traffic around the core and local networks. In
addition, we have more than 600 hub sites, points of presence, repeater nodes or other types of
network sites, and facilities at over 140 radio sites.
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