Virgin Media 2010 Annual Report Download - page 9

PART I
ITEM 1. BUSINESS
Overview
We are a leading entertainment and communications business, being a “quad-play” provider of broadband
internet, television, mobile telephony and fixed line telephony services that offer a variety of entertainment and
communications services to residential and commercial customers throughout the U.K. We are one of the U.K.’s
largest providers of residential broadband internet, pay television and fixed line telephony services by number of
customers. We own and operate cable networks that pass approximately 13 million homes in the U.K. and
provided service to approximately 4.8 million customers on our cable network as of December 31, 2010. We
believe our advanced, deep fiber access network enables us to offer faster and higher quality broadband services
than our digital video subscriber line, or DSL, competitors. As a result, we provide our customers with a leading
next generation broadband service and one of the most advanced television on-demand services available in the
U.K. market. We are also one of the U.K.’s largest mobile virtual network operators by number of customers,
providing mobile telephone service to 1.9 million prepay mobile customers and approximately 1.2 million
contract mobile customers over third party networks. As of December 31, 2010, approximately 63.0% of
residential customers on our cable network were “triple-play” customers, receiving broadband internet, television
and fixed line telephone services from us, and approximately 11.8% were “quad-play” customers.
In addition, we provide a complete portfolio of voice, data and internet solutions to businesses, public sector
organizations and service providers in the U.K. through Virgin Media Business (formerly ntl:Telewest Business).
We also have an interest in the UKTV television channels through our joint ventures with BBC Worldwide.
Disposals
On June 4, 2010, we announced the sale to British Sky Broadcasting Limited, or BSkyB, and Kestrel
Broadcasting Limited (a wholly-owned subsidiary of BSkyB), of our television channel business known as
Virgin Media Television, or Virgin Media TV. Virgin Media TV’s operations comprised Virgin Media
Television Limited and Virgin Media Television Rights Limited and several channel businesses, which have
been treated in the consolidated financial statements as discontinued operations. On the same day, we entered
into new long term carriage agreements with BSkyB, pursuant to which some of BSkyB’s basic channels, the
newly acquired Virgin Media TV channels and BSkyB’s sports and movie channels in standard definition will
continue to be distributed on our cable television service. The carriage agreements also provide for the
distribution of BSkyB’s basic channels in high definition and a selection of premium sport and movie channels in
high definition on our cable television service. Our internal reporting structure and the related financial
information used by management and the chief operating decision maker reflect changes we have made after the
announcement of the sale of Virgin Media TV. Following this announcement, we have two reporting segments,
Consumer and Business, as described below:
• Consumer (84.6% of our 2010 revenue): Our Consumer segment includes the distribution of television
programming over our cable network and the provision of broadband and fixed line telephone services
to residential consumers, both on and off our cable network. Our Consumer segment also includes our
mobile telephony and mobile broadband operations, provided through Virgin Mobile.
• Business (15.4% of our 2010 revenue): Our Business segment includes the voice and data
telecommunication and internet solutions services we provide through Virgin Media Business to
businesses, public sector organizations and service providers.
For financial and other information on our segments, refer to note 18 to the consolidated financial
statements of Virgin Media Inc. included elsewhere in this annual report.
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