Virgin Media 2012 Annual Report Download - page 14

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In addition, we face competition from companies offering Voice over Internet Protocol, or VoIP, services using the
customer's existing broadband, 3G and Wi-Fi connections. These services are offered by independent providers, such
as Vonage, magicJack, WhatsApp and Skype, as well as those affiliated with established competitors such as BT and
EE. These services generally offer free calls between users of the same service, but charge for calls made to fixed
line or mobile numbers either on a flat monthly rate for unlimited calls (typically restricted to geographic areas) or based
on usage. We also face competition from the growth in online communication through social networking sites such as
Facebook and Twitter which has contributed to declining use of telephony services.
Mobile Services
In the mobile telephony market, we face direct competition from mobile network operators, or MNOs, such as O2, EE,
Vodafone and 3 UK, and other Mobile Virtual Network Operators, or MVNOs, such as Tesco Mobile, Lebara, TalkTalk
and ASDA. We also compete with fixed line telephone operators, with companies offering VOIP services, and from
the growth in online communication, as described in “Fixed Line Telephony” above.
EE became the first U.K. mobile network operator to launch 4G in October 2012, following approval from Ofcom to
use its existing 1800MHz spectrum. The auction of the 2.6GHz and 800MHz spectrum by Ofcom started at the end
of 2012, with 4G services expected to go live in mid-2013. The launch of 4G services may introduce new competitors
into the market or strengthen the position of existing competitors.
OUR BUSINESS SEGMENT
Our Business segment, managed through Virgin Media Business, or VMB, offers a broad portfolio of voice, data and
internet solutions to commercial and public sector organizations in the U.K., ranging from analog telephony to managed
data networks and applications. Our Business segment peak usage occurs at different times of the day from our
Consumer segment peak usage, which allows better use of our network. Through Virgin Media Business, we provide
services to approximately 50,000 U.K. businesses and almost 250 public sector organizations. We also supply
communications services to around three quarters of the U.K.'s health and emergency services providers and nearly
one half of U.K. police forces.
Products and Services
We offer contractual service levels to all customers and these are supported by U.K. based regional teams. In addition
to our standard service levels, a tiered service level is available to tailor service requirements based on size of
organization, sector and criticality. These tiered service levels include priority response, named dedicated staff and
field based teams managing service levels face to face based on customer premises.
Data and Internet Services
Converged Solutions
Converged solutions use a single network to transport voice, data and video, allowing our customers to benefit from
cost synergies. Additionally, we offer services such as IP virtual private networks, which enable our customers to
prioritize bandwidth for different types of traffic so that more time sensitive data or critical application data is transported
with priority, providing increased flexibility and control over data management. Our extensive network reach also
enables us to offer large or dispersed organizations the ability to effectively link sites across the U.K. using a wide
range of access technologies, supporting services such as voice and video conferencing, instant messaging and file
transfers.
Ethernet
The Virgin Media Business Ethernet network has approximately 300 Ethernet nodes and is capable of carrying a variety
of services and high bandwidth applications simultaneously. We have been delivering Ethernet services for over 10
years and have achieved both Metro Ethernet Forum, or MEF 9 and MEF 14 accreditation (becoming the first service
provider in the world to renew this accreditation), ensuring our Ethernet product portfolio can support stringent real-
time communications applications, including voice over IP, or VOIP, and HD-quality videoconferencing. We offer a
range of products from local area network extensions to managed wide area Ethernet networks, providing our customers
with high bandwidth and flexible solutions, including market-leading point to multi-point services.
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