Virgin Media 2010 Annual Report Download - page 21

The communications industry is constantly evolving and there are a number of new and emerging
technologies which can be used to provide video services that are likely to compete with our DTV and VOD
services. These include DSL services mentioned above and next generation LTE services. We expect continued
advances in communications technology and in content, such as 3D TV. As a result of changes in technologies,
consumer behavior, and in the regulatory and competitive environments, it is difficult to predict how our
operations and businesses may be affected in the future.
Fixed Line Telephony
We compete primarily with BT in providing telephone services to residential customers in the U.K. BT
occupies an established market position as the incumbent. We also compete with other telecommunications
companies that provide telephone services directly, through LLU, or indirectly, including TalkTalk, BSkyB, and
mobile telephone operators such as O2, Everything Everywhere, Vodafone and 3 UK.
We also compete with mobile telephone networks that offer consumers an alternative to fixed line telephone
services. Mobile telephone services also contribute to the competitive price pressure in fixed line telephone
services. See also “Risk Factors—Risk Relating to our Business and Industry—Our fixed line telephony business
is in decline and not likely to improve”.
In addition, we face competition from companies offering VoIP services using the customer’s existing
broadband connection. These include services offered by independent providers, such as Vonage and Skype, as
well as those affiliated with established competitors such as BT and Everything Everywhere and also the growth
in online communication through Facebook and Twitter. These services generally offer free calls between users
of the same service, but charge for calls made to fixed line or mobile numbers either on a flat monthly rate for
unlimited calls (typically restricted to geographic areas) or based on usage.
Mobile Telephony
In the mobile telephony market, we face direct competition from mobile network operators, or MNOs, such
as O2, Everything Everywhere, Vodafone and 3 UK, and other MVNOs, such as Tesco Mobile, Lebera, TalkTalk
and ASDA. We also compete with fixed line telephone operators and VoIP providers.
Business Segment
The U.K. business telecommunications market is characterized by strong competition and ongoing
consolidation. Competition in the U.K. business telecommunications market continues to be value driven, the key
components of which are quality, reliability and price.
Virgin Media Business competes primarily with traditional network operators, such as BT and C&W. BT
represents the main competitive threat nationally due to its network reach and product portfolio. We also
compete with regional providers, such as COLT Telecom Group plc, or COLT Telecom, which have a strong
network presence within limited geographic areas. Recently, we have faced increasing competition from the
launch of services by MNOs targeting small business customers.
Within retail markets, traditional competitors are becoming increasingly focused, with organizations such as
C&W targeting larger national and multi-national corporations. We continue to focus on small, medium and
large nationally oriented businesses and public sector organizations. SIs, such as Affiniti, a trading name of
Kingston Communications (Hull) Plc, are also becoming an increasing competitive threat, as large organizations
continue to focus on IT integration, management and outsourcing.
Seasonality
Some revenue streams are subject to seasonal factors. For example, fixed line telephone usage revenue by
customers and businesses tends to be slightly lower during summer holiday months, mobile customer acquisition
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