Virgin Media 2009 Annual Report Download - page 76
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Revenue
Our Business segment revenue for the years ended December 31, 2008 and 2007 was comprised of
(in millions):
Year ended
December 31, Increase/
2008 2007 (Decrease)
Revenue:
Retail:
Voice ..................................... £190.8 £214.6 (11.1)%
Data ...................................... 190.9 170.6 11.9%
LAN solutions .............................. 61.6 67.3 (8.5)%
443.3 452.5 (2.0)%
Wholesale ................................... 182.7 189.3 (3.5)%
Total revenue ................................... £626.0 £641.8 (2.5)%
For the year ended December 31, 2008, revenue from business customers decreased by 2.5% to
£626.0 million from £641.8 million for the year ended December 31, 2007. The decrease was
attributable to declines in retail voice, Local Area Network (LAN) solutions and wholesale revenues,
partially offset by growth in retail data revenue. Retail voice revenue decreased mainly as a result of
declining telephony usage, as a result of which our strategy has been to replace this declining voice
revenue with increasing data revenue. Retail data revenue represented 43.1% of the retail business
revenue for the year ended December 31, 2008 compared with 37.7% for the year ended December 31,
2007.
LAN solutions revenue in the year ended December 31, 2008 was £61.6 million compared to
£67.3 million for the year ended December 31, 2007. The majority of this revenue is from infrastructure
projects which are non-recurring in nature. Our largest infrastructure project was the provision of
telecommunication network equipment for Heathrow airport’s new Terminal 5 which contributed
£21.0 million of revenue in the year ended December 31, 2008 compared to £27.9 million in the year
ended December 31, 2007. This contract, however, operated at a lower margin and, consequently, it did
not have a significant impact on Business segment contribution.
Wholesale revenue decreased mainly as a result of fewer customers in a highly competitive market
partly offset by stronger than usual customer equipment sales in the last three months of the year.
Business Segment Contribution
For the year ended December 31, 2008, Business segment contribution decreased to £335.2 million
from £338.4 million for the year ended December 31, 2007. The decline in revenue as described above
was partially offset by related declines in directly attributable costs and indirect expenditure.
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