Virgin Media 2011 Annual Report Download - page 26

Sustained or repeated system failures that interrupt our ability to provide services to our customers, prevent
us from billing and collecting revenue due to us, or that otherwise prevent us from meeting our obligations to our
customers in a timely manner, would adversely affect our reputation and result in a loss of customers and
revenue. These network and information systems-related events could also require significant expenditures to
repair or replace damaged networks or information systems or to protect them from similar events in the future.
Further, any security breaches, such as misappropriation, misuse, penetration by viruses, worms or other
destructive or disruptive software, leakage, falsification or accidental release or loss of information maintained in
our information technology systems and networks or those of our business partners (including customer,
personnel and vendor data) could damage our reputation, result in legal and/or regulatory action against us, and
require us to expend significant capital and other resources to remedy any such security breach. The occurrence
of any such network or information system-related events or security breaches could have a material adverse
effect on our business and results of operations.
Unauthorized access to our network resulting in piracy could result in a loss of revenue.
We rely on the integrity of our technology to ensure that our services are provided only to identifiable
paying customers. Increasingly sophisticated means of illicit piracy of television, broadband and telephony
services are continually being developed in response to evolving technologies. Furthermore, billing and revenue
generation for our pay television services rely on the proper functioning of our encryption systems. While we
continue to invest in measures to manage unauthorized access to our networks, any such unauthorized access to
our cable television service could result in a loss of revenue, and any failure to respond to security breaches could
raise concerns under our agreements with content providers, all of which could have a material adverse effect on
our business and results of operations.
We rely on third-party suppliers and contractors to provide necessary hardware, software or operational
support and are reliant on them in a way which could economically disadvantage us.
We rely on third-party vendors to supply us with a significant amount of customer equipment, hardware,
software and operational support necessary to operate our network and systems and provide our services. In
many cases, we have made substantial investments in the equipment or software of a particular supplier, making
it difficult for us in the short term to change supply and maintenance relationships in the event that our initial
supplier is unwilling or unable to offer us competitive prices or to provide the equipment, software or support
that we require. In addition, certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection
Act may soon require us to report on “conflict materials” used in our products and the due diligence plan we put
in place to track whether such minerals originate from the Democratic Republic of Congo and adjoining
countries. The implementation of these requirements could affect the sourcing and availability of minerals used
in certain of our products.
We also rely upon a number of third-party contractors to construct and maintain our network and to install
our equipment in customers’ homes. Quality issues or installation or service delays relating to these contractors
could result in liability, reputational harm or contribute to customer dissatisfaction, which could result in
additional churn or discourage potential new customers.
We are furthermore exposed to risks associated with the potential financial instability of our suppliers, some of
whom may have been adversely affected by the global economic downturn. If our suppliers were to discontinue
certain products, were unable to provide equipment to meet our specifications or interrupt the provision of
equipment or services to us, whether as a result of bankruptcy or otherwise, our business and profitability could be
materially adversely affected.
The “Virgin” brand is not under our control and the activities of the Virgin Group and other licensees could
have a material adverse effect on the goodwill of customers towards us as a licensee.
The “Virgin” brand is integral to our corporate identity. We are reliant on the general goodwill of consumers
towards the Virgin brand. Consequently, adverse publicity in relation to the Virgin Group or its principals,
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