Virgin Media 2011 Annual Report Download - page 24

ITEM 1A. RISK FACTORS
In addition to the information contained in this annual report on Form 10-K, you should consider the
following risk factors in evaluating our results of operations, financial condition, business and operations or an
investment in our stock.
The risk factors described in this section have been separated into three groups:
• risks relating to our business and industry;
• risks relating to our financial indebtedness and structure; and
• risks relating to our common stock.
In addition to the information presented in this annual report, there may be other unknown or unpredictable
economic, business, competitive, regulatory or other factors that also could have material adverse effects on our
results of operations, financial condition, business or operations in the future. In addition, past financial
performance may not be a reliable indicator of future performance and historical trends should not be used to
anticipate results or trends in future periods.
If any of the events described below were to occur, our businesses, prospects, financial condition, results of
operations and/or cash flows could be materially adversely affected.
Risks Relating to Our Business and Industry
We operate in highly competitive markets which may lead to a decrease in our revenue, increased costs,
increased customer churn or a reduction in the rate of customer acquisition.
The markets for broadband internet, television, telephony and business services in which we operate are
highly competitive and, in certain markets, we compete with established companies which hold positions of
market power in these and/or closely related markets. We face competition from these companies, other
established companies and potential new entrants. Technological advances may increase competition or alter the
competitive dynamics of markets in which we operate, for example, distributions of entertainment and other
information over the internet, as well as the distribution of entertainment through mobile phones and other
devices which continue to increase in popularity. The number of media choices available to subscribers. In
addition, continued consolidation within the media industry may permit more competitors to offer “triple-play”
bundles of digital television, fixed line telephony and broadband services, or “quad-play” bundles including
mobile telephone services. Consolidation by competitors can create economies of scale that we cannot replicate,
for example in the mobile sector. Many of our competitors are part of multinational groups, and some may have
substantially greater financial resources and benefit from greater economies of scale than we do.
In order to compete effectively, we may be required to reduce the prices we charge for our services or
increase the value of our services without being able to recoup associated costs. We may also need to pursue
legal and regulatory actions. In addition, some of our competitors offer services that we are unable to offer. Any
increase in competitive pressures in our markets may lead to a decrease in our revenue, increased costs, increased
customer churn or a reduction in the rate of customer acquisition, which could have an adverse effect on our
business, financial condition, results of operations and cash flows. See also “Business—Competition”.
The sectors in which we compete are subject to rapid and significant changes in technology, and the effect of
technological changes on our businesses cannot be predicted.
The broadband internet, television, telephony and business services sectors are characterized by rapid and
significant changes in technology. Advances in current technologies, such as VoIP (over fixed and mobile
technologies), 3D TV, mobile instant messaging (including both SMS and BBS), wireless fidelity, or Wi-Fi, the
extension of local Wi-Fi networks across greater distances, or WiMax, LTE, internet protocol television, or the
23