Virgin Media 2011 Annual Report Download - page 16

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 cable modem termination system, or
CMTS technology, which significantly increased upstream and downstream transmission speeds across our
network. Throughout 2011, we have continued to invest in the growth of our DOCSIS 3.0 and broadband related
network platforms, as well as adding capacity for HD broadcast and VOD services. In 2011, we extended our
network to provide triple play cable capability to approximately 170,000 additional homes. We also continued to
invest in upgrading our access network from analog to digital with the latest deep fiber architectures in areas
covering some approximately 200,000 homes. This largely completed the upgrade from analog to digital across
our entire access network footprint. As of December 31, 2011, approximately 97% of the homes served by our
cable network could receive all our broadband, digital television and fixed line telephony 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 providers 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 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 and improve the stability of these systems. In 2011 we
announced the outsourcing of our mobile application development and applications support function as well as
development testing functions to a key strategic partner to improve service levels and lower the total cost of these
services.
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 are likely to 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.”
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 BT which many of our competitors rely on to provide their
services.
We also face intense competition in the mobile telephony market, which is primarily driven by increased
pricing pressure from both established and new service providers, evolving customer needs and technological
developments.
We offer most of our products on a stand alone basis or as part of bundled packages designed to encourage
customers to subscribe to multiple services. We offer broadband internet, fixed line telephony and mobile
telephony and data services throughout the U.K., and currently offer television services exclusively in areas
served by our cable network.
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