Virgin Media 2011 Annual Report Download - page 22

Fixed Line Telephony Services
As a fixed network operator we, like all other fixed network operators, are deemed to have SMP in
wholesale call termination on our own network, and are therefore subject to SMP conditions in this market.
However, these conditions do not have a significant impact on our ability to compete in the wholesale market.
Ofcom is in the process of undertaking a fundamental review of the regulatory regime applying to
non-geographic calling services. This is likely to result in a significant change to the retail and wholesale
charging arrangements to which such calls are subject. We are working closely with Ofcom in its consideration
and development of these reforms in order to mitigate risks and maximise opportunities.
Broadband Services
In late 2010 Ofcom concluded reviews of the Wholesale Local Access, or WLA, market (physical or passive
network access via methods such as LLU and duct access) and Wholesale Broadband Access, or WBA, market
(virtual or active network access via methods such as provision of wholesale managed service products). Ofcom
concluded that Virgin Media does not have SMP in these markets and so we are not subject to SMP regulation.
Typically, such conclusions apply for three to four years.
BT continues to have SMP in the WLA market and certain sub-national areas of the WBA market and must
therefore provide certain products and services on regulated terms, (which includes providing access to its ducts
and poles). Ofcom’s next review of these two markets is expected to commence in early 2013.
Mobile Telephony Services
As a MVNO, we are subject to EU regulations relating to retail prices for roaming services. The Roaming
Regulation (European Commission Regulation 717/2007 as amended) sets limits on certain wholesale and retails
tariffs for international mobile voice roaming, SMS tariffs and data roaming within the EU, provides for greater
levels of transparency of retail pricing information and sets maximum roaming rates within the EU. New
regulations aimed at preventing consumer bill shock relating to data roaming charges are currently being debated
in the European Parliament. These new regulations, if passed would require all mobile retailers to allow their
customers to effectively preselect a different operator to provide their roaming services and set new caps on
SMS, voice and data roaming.
Mobile termination charges applied by MNOs are regulated by Ofcom under SMP conditions, one of which
requires MNOs to reduce their mobile termination charges over time. Under our MVNO agreement with
Everything Everywhere, these changes in mobile termination charges are passed on to Virgin Mobile U.K.
Ofcom’s decision on the mobile termination caps to be applied between 2011 and 2015 is currently being
challenged before the Competition Appeals Tribunal.
Non-Industry Specific Regulation
Our business activities are subject to certain environmental and health and safety laws and regulations.
Failure to comply with these laws and regulations may result in us incurring fines or other penalties and we may
incur expenditure to account for these fines or penalties, maintain compliance and/or undertake any necessary
remediation. In addition, any breach of the aforementioned laws and/or regulations by our affiliates, vendors and
contractors could result in liability for us.
Corporate Responsibility and Sustainability
In 2011, we continued to prioritize three sustainability objectives: becoming a low carbon, low waste
business; creating a diverse and inclusive workplace; and working with our suppliers to meet our sustainability
challenges. Targets for improved performance were set across each of these objectives in addition to our long-
term target of reducing our 2007 carbon footprint by 15% by 2015.
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