Virgin Media 2009 Annual Report Download - page 12

Consumer Segment
Cable Products and Services
We provide cable broadband internet, television and fixed line telephone services under the Virgin
Media brand to residential customers in the U.K. Our cable services are distributed via our wholly
owned, local access cable network. Our cable network covers parts of many major metropolitan areas in
England, Wales, Scotland and Northern Ireland. We offer our customers a choice of several packages
and tariffs within each of our cable product categories. Our bundled packaging and pricing are
designed to encourage our customers to purchase multiple services across our product portfolio by
offering discounts to customers who subscribe to two or more of our products. The types and number
of services that each customer uses, and the prices we charge for these services, drive our revenue. For
example, broadband internet is more profitable than our television services and, on average, our
‘‘triple-play’’ customers are more profitable than ‘‘double-play’’ or ‘‘single-play’’ customers. As of
December 31, 2009, 85.2% of our cable customers received multiple services from us and 60.5% were
‘‘triple-play’’ customers, receiving broadband internet, television and fixed line telephone services
from us.
Broadband Internet
We deliver high-speed broadband internet services to customers on our cable network. As of
December 31, 2009, we provided cable broadband services to approximately 3.8 million subscribers. In
2009, we completed significant upgrades to our network, including the network-wide roll-out of the
latest DOCSIS 3.0 technology, which significantly increased upstream and downstream data
transmission speeds across our network. Following these network upgrades, in July 2009, we became
the first provider to offer download speeds of up to 50 Mbps to over 12 million homes across the U.K.
In May 2009, we also initiated preliminary trials of download speeds of up to 200 Mbps and upload
speeds of up to 10 Mbps within limited geographic areas.
Our broadband internet offering currently focuses on three tiers of high-speed broadband service
at download speeds of up to 10 Mb, 20 Mb and 50 Mb, respectively. Our customers within each of
these tiers also benefit from unlimited downloads, subject to our fair usage and traffic management
policies, and advanced security software, including anti-virus and anti-spyware protection. In 2009, we
also increased our focus on developing additional products to complement our broadband offering,
such as our online data storage service, which allows our top tier subscribers to back-up, store and
share specified amounts of data and photographs online for no additional charge. We also expect to
launch a digital music service in 2010, which will allow our cable broadband customers to stream and
download an unlimited number of music tracks from Universal Music’s catalogue for a monthly
subscription fee.
We operate a web portal, virginmedia.com, which offers a broad range of content, such as music,
games, movies and television programming, including near-live clips of English football highlights. In
December 2009, we introduced an online gaming channel to our web portal, which was followed in
January 2010, by the launch of a music channel, offering streaming video content. Our customers are
also able to access their email accounts and customer care information through our website. We
generate revenue from our website, primarily from third-party advertising and search engines. We also
use the website to cross-promote our product portfolio.
Television
We offer a wide range of television services to customers on our cable network. As of
December 31, 2009, we provided cable television services to approximately 3.7 million residential
subscribers, of which approximately 3.6 million received our digital television, or DTV service and
approximately 87,000 received our analog television, or ATV, service.
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