Virgin Media 2013 Annual Report Download - page 111

III - 1
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis is intended to assist in providing an understanding of our financial condition, changes
in financial condition and results of operations and should be read in conjunction with our consolidated financial statements. This
discussion is organized as follows:
• Overview. This section provides a general description of our business and recent events.
• Results of Operations. This section provides an analysis of our results of operations for the years ended December 31,
2013, 2012 and 2011.
• Liquidity and Capital Resources. This section provides an analysis of our corporate and subsidiary liquidity, consolidated
statements of cash flows and contractual commitments.
• Critical Accounting Policies, Judgments and Estimates. This section discusses those material accounting policies that
contain uncertainties and require significant judgment in their application.
• Quantitative and Qualitative Disclosures about Market Risk. This section provides discussion and analysis of the foreign
currency, interest rate and other market risk that our company faces.
The capitalized terms used below have been defined in the notes to our consolidated financial statements. In the following
text, the terms, “we,” “our,” “our company” and “us” may refer, as the context requires, to Virgin Media (or Old Virgin Media) or
collectively to Virgin Media (or Old Virgin Media) and its subsidiaries.
Unless otherwise indicated, convenience translations into pound sterling are calculated, and operation data (including
subscriber statistics) are presented, as of December 31, 2013.
Overview
We are a subsidiary of Liberty Global that provides digital cable, broadband internet, fixed-line telephony and mobile services
in the U.K. to both residential and B2B customers. We are one of the U.K.’s largest providers of residential digital cable, broadband
internet and fixed-line telephony services in terms of the number of customers. We believe our advanced, deep-fiber cable access
network enables us to offer faster and higher quality broadband services than our digital subscriber line, or DSL competitors. As
a result, we provide our customers with a leading next generation broadband service and one of the most advanced interactive TV
services available in the U.K. market.
Our residential broadband subscribers generally access the internet at various download speeds ranging up to 152 Mbps, as
of February 2014, depending on the tier of service selected. We determine pricing for each different tier of broadband internet
service through analysis of speed, market conditions and other factors.
Our digital cable service offerings include basic and premium programming and incremental product and service offerings
such as enhanced pay-per-view programming (including digital cable-on-demand), digital cable recorders, high definition and 3D
programming and access to over-the-top content.
We provide mobile services to our customers using a third-party network through an MVNO arrangement.
In addition, we provide broadband internet, fixed-line and mobile telephony and other connectivity services to businesses,
public sector organizations and service providers.
We strive to achieve organic revenue and customer growth by developing and marketing bundled entertainment and information
and communications services, and extending and upgrading the quality of our network where appropriate. While we seek to obtain
new customers, we also seek to maximize the average revenue we receive from each household by increasing the penetration of
our digital cable, broadband internet, fixed-line telephony and mobile services with existing customers through product bundling
and upselling.