Virgin Media 2008 Annual Report Download - page 19

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 communications services, including high-speed broadband internet, television, and fixed
line telephone services using our advanced network, while many of our competitors must rely on BT’s
network to provide their 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
broadband 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.
Key recent developments amongst our primary competitors have included:
•BT Group plc. During 2008, BT announced plans to roll out fiber-based broadband over the
next three years to as many as 10 million homes. While the full implementation of this
£1.5 billion program has been made subject to the continued existence of favorable regulatory
conditions, it is intended to deliver a range of services using a mixture of fiber-to-the-premise or
fiber-to-the-cabinet technology. BT also continued to expand its library of on-demand
programming through a number of agreements with content partners for its internet protocol, or
IP, pay television service, BT Vision.
•British Sky Broadcasting Group plc. BSkyB, a long-time competitor in the pay television market,
markets aggressively discounted triple-play bundles (broadband, television and fixed line
telephone). BSkyB also has a limited video-on-demand service branded Sky Anytime for their
customers with compatible PVRs. During 2008, BSkyB launched Sky Player TV, an online only
subscription TV service offering live streamed TV and video-on-demand.
•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. During 2008, Carphone Warehouse continued to
pursue an aggressive pricing policy for its TalkTalk fixed telephone line and broadband bundle by
standardizing the package and offering ‘‘Boost’’ packages (including higher download speed and
additional voice calls), which are each available at a fixed incremental cost per month. Using its
separate AOL brand, Carphone Warehouse continued to offer a broadband package including a
free laptop and launched a fixed line telephone service.
•Tiscali S.p.A. Tiscali offers fixed line telephone, broadband and IP-based television services.
During 2008, Tiscali continued its aggressive bundled pricing strategy.
•Orange. Orange offers a triple play of mobile phone, fixed line phone and broadband services.
During 2008, Orange launched a mobile broadband package, as both a stand alone service and
bundled with its fixed line broadband service.
•O2. O2 launched a fixed line broadband service in late 2007, followed by a mobile broadband
service in 2008.
Broadband Internet
Our largest competitor in internet services is BT, which provides broadband internet access services
over its own DSL network both as a retail brand and as a wholesale service. As of April 1, 2009, the
prices charged by BT to other internet service providers, or ISPs, may be increased by an amount yet
to be determined by the U.K. Office of Communications, or Ofcom.
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