Virgin Media 2010 Annual Report Download - page 75

Revenue
Our Business segment revenue for the years ended December 31, 2009 and 2008 was comprised of
(in millions):
December 31, Increase/
(Decrease)2009 2008
Revenue:
Retail:
Data ............................................ £213.7 £190.9 11.9%
Voice ........................................... 176.5 190.8 (7.5)
LAN Solutions and other ............................ 36.7 61.6 (40.4)
426.9 443.3 (3.7)
Wholesale ........................................ 153.9 182.7 (15.8)
Total revenue ............................................. £580.8 £626.0 (7.2)%
For the year ended December 31, 2009, revenue from business customers decreased by 7.2% to
£580.8 million from £626.0 million for the year ended December 31, 2008. 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. Our
strategy is to replace this declining voice revenue with increasing data revenue. Retail data revenue represented
50.1% of the retail business revenue for the year ended December 31, 2009 compared with 43.1% for the year
ended December 31, 2008.
LAN solutions and other revenue in the year ended December 31, 2009 was £36.7 million compared to
£61.6 million for the year ended December 31, 2008. 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 £0.4 million of revenue in the year
ended December 31, 2009 compared to £21.0 million in the year ended December 31, 2008. 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 the loss of certain lower margin contracts and wholesale
voice customers.
Business Segment Contribution
For the year ended December 31, 2009, Business segment contribution increased to £339.7 million from
£335.2 million for the year ended December 31, 2008. The increase in segment contribution was due primarily to
the result of higher margin retail data contracts and wholesale revenue contracts replacing lower margin voice
and infrastructure projects.
Television Channel Joint Ventures
We own 50% of the companies that comprise UKTV, a group of joint ventures formed with BBC
Worldwide. UKTV produces a portfolio of television channels based on the BBC’s program library and other
acquired programming and which are carried on Virgin Media’s cable platform and also by satellite. Some
channels are also available on Freeview.
We account for our interest in UKTV under the equity method and recognized a share of net income of
£16.5 million and £18.7 million in the years ended December 31, 2009 and 2008, respectively. At December 31,
2009, our investment in UKTV was carried on the consolidated balance sheet at £359.9 million, which includes
outstanding loans totaling £129.3 million.
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