Virgin Media 2009 Annual Report Download - page 28

emergence of new technologies, may result in our core offerings becoming less competitive or render
our existing products and services obsolete. We may not be able to develop new products and services
at the same rate as our competitors or keep up with trends in the technology market as well as our
competitors. The cost of implementing emerging and new technologies could be significant, and our
ability to fund that implementation may depend on our ability to obtain additional financing. Similarly,
the deployment of new technologies in the spectrum frequencies in which we operate could have an
impact on the existing services offered by us, with a consequential impact on our businesses.
If we do not maintain and upgrade our networks in a cost-effective and timely manner, we could lose
customers.
Maintaining an uninterrupted and high-quality service over our network infrastructure is critical to
our ability to attract and retain customers. Providing a competitive service level will depend in part on
our ability to maintain and upgrade our networks in a cost-effective and timely manner. The
maintenance and upgrade of our networks will depend upon, among other things, our ability to:
• modify network infrastructure for new products and services, including faster broadband speeds;
• install and maintain cable and equipment; and
• finance maintenance and upgrades.
Our covenants in our senior credit facility effectively restrict our use of cash. If these covenants
affect our ability to replace network assets at the end of their useful lives or if there is any reduction in
our ability to perform necessary maintenance on network assets, our networks may have an increased
failure rate, which is likely to lead to increased customer churn.
A failure in our network and information systems could significantly disrupt our operations, and a disruption
or failure of such networks or systems may disrupt our business.
Certain network and information systems are critical to our business activities. Network and
information systems-related events, such as theft, computer hackings, computer viruses, worms or other
destructive or disruptive software, or other malicious activities, or power outages, gas build-up, fire,
natural disasters, terrorist attacks, war or other similar events, could result in a degradation or
disruption of our cable and non-cable services, excessive call volume to call centers or damage to our
equipment and data. We do not have a company-wide disaster recovery plan, however, we continue to
develop plans for key areas of risk in the business. For example, in 2009 we developed a business-wide
continuity plan to manage significant disruptions to our business due to the threat of pandemic
influenza.
Sustained or repeated system failures that interrupt our ability to provide services to our
customers, prevent us from billing and collecting revenue due to us, or that otherwise prevent us from
meeting our obligations to our customers in a timely manner, would adversely affect our reputation and
result in a loss of customers and revenue. These network and information systems-related events could
also result in significant expenditures to repair or replace the damaged networks or information systems
or to protect them from similar events in the future. Further, any security breaches, such as
misappropriation, misuse, penetration by viruses, worms or other destructive or disruptive software,
leakage, falsification or accidental release or loss of information maintained in our information
technology systems (or those of our business partners) and networks, including customer, personnel and
vendor data, could damage our reputation, result in legal and/or regulatory action against us, and
require us to expend significant capital and other resources to remedy any such security breach. The
occurrence of any such network or information system-related events or security breaches could have a
material adverse effect on our business and results of operations.
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