Virgin Media 2010 Annual Report Download - page 18

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 Mb downstream and 10 Mb 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
2010, we upgraded or extended our network to provide triple play cable capability to over 100,000 additional
homes. As of December 31, 2010, approximately 97% 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 to 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 Everything Everywhere. We also use networks owned by other partners to provide
some ancillary services. Everything Everywhere 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, business intelligence,
corporate network, payroll, data center and desktop infrastructure. We are also continuing to decommission or
consolidate a number of diverse software applications and hardware platforms in order to reduce our dependency
on high cost external support and management services. In 2010, we also completed the in-sourcing of services
from two of our outsourced providers, as part of our plan to consolidate systems and move to a strategic sourcing
model with a small number of key partners.
Competition
Consumer Segment
We face intense competition from a variety of entertainment and communications service providers, which
offer comparable broadband internet, television, fixed line telephony and mobile telephony services. In addition,
technological advances and product innovations have increased, and will likely continue to increase, the number
of alternatives available to our customers from other providers and intensify the competitive environment. See
“Risk Factors—We operate in highly competitive markets.” However, we believe that we have a competitive
advantage in the U.K. residential market due to the superior technical capabilities of our cable network over the
network of the incumbent BT, which many of our competitors rely on to provide their services. We also face
intense competition in the mobile telephony market, primarily driven by increased pricing pressure from both
established and new service providers, evolving customer needs and technological developments.
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