Virgin Media 2008 Annual Report Download - page 35

Revenue from our Content segment is highly dependent on subscriber fees and the television advertising
market.
Our Content segment owns pay channels through Virgin Media TV and our joint ventures with the
BBC and derives its revenue primarily from subscriber fees and advertising revenue. BSkyB, our main
competitor, is our largest customer for our programming. In early 2007, BSkyB used its dominant
position in pay television to substantially reduce the fees it paid for our Virgin Media TV channels,
although we entered into a new carriage agreement with BSkyB in November 2008 that increased the
fees it is required to pay for our channels through to May 2011. As we are dependent upon carriage of
our programming in order to attract advertising revenue, BSkyB has considerable power to dictate the
fees that we charge for our programs. In addition, the TV advertising market has faced steady declines
over the last few years, especially during the economic downturn. A failure to generate sufficient
subscriber fees or advertising revenue would have a negative effect on our Content segment revenue
and cash flow.
Virgin Mobile relies on T-Mobile’s network to carry its communications traffic.
Virgin Mobile relies on its long term agreement with T-Mobile for voice, non-voice and other
telecommunications services we provide our mobile customers, as well as for certain ancillary services
such as pre-pay account management. If the agreement with T-Mobile is terminated, or if T-Mobile
fails to deploy and maintain its network, or if T-Mobile fails to provide the services as required under
our agreement with them and we are unable to find a replacement network operator on a timely and
commercial basis, if at all, we could be prevented from carrying on our mobile business or, if we found
a replacement operator, we may be able to carry on our mobile business only on less favorable terms
or provide less desirable services. Additionally, any migration of all or some of our customer base to a
new operator would be in part dependent on T-Mobile and could entail potential technical or
commercial risk. T-Mobile is also a customer of our business division. Any disagreements between
T-Mobile and Virgin Mobile may affect our other relationships with T-Mobile.
We depend on the ability to attract and retain key personnel without whom we may not be able to manage our
business lines effectively.
We operate in a number of rapidly changing technologically advanced markets that will continue to
challenge our business. There is significant competition in attracting and retaining qualified personnel
in the telecommunications industry, especially individuals with experience in the cable sector. We
believe that the unique combination of skills and experience possessed by our senior management
would be difficult to replace, and that the loss of our key personnel could have a material adverse
effect on us, including the impairment of our ability to execute our business plan. Our future success is
likely to depend in large part on our continued ability to attract and retain highly skilled and qualified
personnel.
Certain of our significant stockholders could have an influence over our business and affairs.
Certain persons or entities are our significant stockholders. Based on SEC filings as of
February 24, 2009, Fidelity Management & Research Company beneficially owns 14.9% of our issued
and outstanding common stock, the Virgin Group beneficially owns 10.4%, Franklin Mutual
Advisers, LLC beneficially owns 9.2%, Wellington Management Company beneficially owns 8.6%,
Ameriprise Financial, Inc. beneficially owns 6.9%, Capital World Investors beneficially owns 5.9% and
Goldman Sachs Asset Management, LP beneficially owns 5.2%, of our issued and outstanding common
stock. Each of these significant stockholders could have an influence over the business and affairs of
our company.
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