Virgin Media 2009 Annual Report Download - page 18

Virgin Media TV generates revenues largely on advertising and subscription revenues from the
television programming it supplies to the U.K. multi-channel television market. The Virgin Media TV
channels and UKTV channels are available via a number of platforms, including our own analog and
digital platforms and a third-party satellite digital platform. The channels generate revenue by the sale
of airtime and sponsorship to advertisers and advertising agencies managed through our 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 and UKTV are
also represented on Freeview, a U.K. free-to-air digital television service, with the channels Yesterday,
Dave and Virgin1 available to Freeview viewers as well as subscribers to all multi-channel platforms.
Our Network
We deliver high-speed voice and data services over our HFC network using Data Over Cable
Service Interface Specification 3.0, or DOCSIS 3.0. Our deep fiber access network enables us to
transmit data by means of fiber optic cable from origination points known as ‘‘headends’’ and ‘‘hubs’’ to
a group of distribution ‘‘nodes.’’ The connection into each home from the fiber access network
comprises two components combined into a single drop cable. First, to provide television services and
high-speed broadband internet access, we use high capacity, two-way, coaxial cable which has
considerable bandwidth and is able to support a full portfolio of linear and on-demand TV services as
well as high-speed broadband services. We currently offer download speeds of up to 50 Mbps via
coaxial cable, and have trials underway with respect to download speeds of up to 200 Mbps. Second, we
use short length twisted copper-pair to connect fixed line telephony services to our fiber access
network. Our relatively short twisted copper pairs (typically 500 meters in length) are also capable of
supporting the latest Very High Speed Digital Subscriber Line 2, or VDSL2, broadband technologies,
enabling speeds of up to 50 Mbps downstream and 10 Mbps upstream. As a result of the extensive use
of fiber in our access networks, we are also able to provide high-speed Ethernet services directly to
business customers and provide nationwide area networking to these customers via our core networks.
We believe that 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. 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 transmission speeds across our network. We
also invested in extending our network and upgrading from analogue to digital in select urban areas
where a significant level of traffic is anticipated. In 2009, we upgraded or extended our network to
provide ‘‘triple play’’ cable capability to over 100,000 additional homes. As of December 31, 2009,
approximately 96% of the homes served by our cable network could receive all our broadband, digital
television and fixed line telephone services.
We also employ a variety of alternative methods to connect our national telecommunications
network over the ‘‘last mile’’ to the premises of customers located beyond the reach of our cable
network, including by leasing circuits and DSL connections on the local networks of other service
providers.
Our mobile communication services are provided over cellular networks owned by third parties.
Our main mobile network provider is T-Mobile. We also use networks owned by other partners to
provide some ancillary services. T-Mobile currently operates 2G, 2.5G, 3G and 3.5G networks in
the U.K.
Information Technology
The operation and support of our information technology systems are performed by a mix of
outsourced and internally managed services. These systems include billing, enterprise resource planning,
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