Full Description

Virgin Media Inc. (Virgin Media), incorporated in 1993, is a United Kingdom-based entertainment and communications business. Virgin Media is a residential broadband and mobile virtual network operator, and a provider in the United Kingdom of pay television and fixed-line telephone services. Virgin Media manages its business through three segments: Cable, Mobile and Content. The Cable segment includes the distribution of television programming over the Company’s cable network, and the provision of broadband and fixed-line telephone services to consumers, businesses and public sector organizations. During the year ended December 31, 2008, the Cable segment accounted for 76.8% of the Company’s revenue. The Mobile segment includes the provision of mobile telephone services under the name Virgin Mobile to consumers over cellular networks owned by third parties. In 2008, Mobile segment accounted for 14.2% of its revenue. The Company’s Content segment includes the operations of its United Kingdom television channels, such as Virgin1, Living, Bravo, and sit-up's portfolio of retail television channels. The Content segment accounted for 9% of the Company’s 2008 revenue. In April 2009, Virgin Media Inc. announced that AURELIUS AG has acquired sit-up Ltd.

Cable Segment

In the Cable segment, Virgin Media provides television, Internet and fixed-line telephone services under the Virgin Media brand to residential customers in the United Kingdom. The Company’s services are distributed principally via its wholly owned, cabled local access communications network, and are available to an addressable market of approximately 12.6 million homes. The network covers parts of many major metropolitan areas in England, Wales, Scotland and Northern Ireland. In addition, it provides broadband and telephone services to residential customers outside of its cable network via access to other telecommunications networks.

Virgin Media provides residential triple-play offering of television, broadband and fixed-line telephone services. As of December 31, 2008, approximately 84% of its on-net customers received multiple services from it, and approximately 56% of its on-net customers were triple-play. Virgin Media delivers high-speed broadband and Internet services to customers within reach of its access network by direct connection to its network. The Company also provides broadband Internet services via British Telecommunications’ (BT's) local access network. As of December 31, 2008, the Company had approximately 252,000 broadband subscribers using this service.

The Company offers a range of digital television (DTV) and analog television (ATV) services. As of December 31, 2008, the Company provided cable television services to approximately 3.6 million residential subscribers, of which approximately 3.5 million received its DTV service and approximately 152,000 received its ATV service. The Company’s DTV service includes access to over 150 television channels. The Company’s ATV service packages offer up to 60 television channels, including premium services. In addition to offering the basic and premium pay TV channels, the Company also offers its DTV customers video-on-demand (VOD) services in the United Kingdom called Virgin TV On Demand.

Virgin TV On Demand offers viewers choice over and above scheduled programming without any requirement for new equipment, installation or additional subscription fees. The VOD service provides access to thousands of hours of premium movies, music videos, and television programs and series on demand. It appears within the existing electronic programming guide, and can be accessed and viewed at any time via the remote control. The service offers digital versatile disc (DVD)-style features, including freeze frame, fast-forward and rewind. These features provide a customer with control over the content and timing of their television viewing.

Virgin Media offers digital video recorders (DVRs), for a premium monthly rental option. The Virgin Media DVR box, which is called the V+ Box, is available to its entire DTV customer base. The V+ Box has 160 gigabytes of storage space (up to 80 hours of broadcast television), is high definition (HD) enabled and has three tuners, allowing viewers to record two programs, while watching a third. V+ Box customers that also have an HD compatible television can access its HD on demand content.

The Company provides local, national and international telephone services to its residential customers who are within reach of its access network by direct connection to its network. It offers additional services, such as call waiting, call barring (which allows customers to block certain incoming or outgoing calls), call diversion (call forwarding), three-way calling, advanced voicemail, caller line identification and itemized monthly billing. It also provides national and international directory enquiry services. As of December 31, 2008, the Company provided on-net telephone services to approximately 4.1 million residential customers. It also provides phone service via BT’s local access network to customers outside of its network. As of December 31, 2008, Virgin Media provided off-net telephone services to approximately 105,500 customers.

Mobile Segment

As a mobile virtual network operator, Virgin Mobile provides mobile telephone services to its customers over cellular networks owned by third parties. As of December 31, 2008, Virgin Mobile had approximately 4.1 million customers, of which approximately 649,400 were contract customers. Virgin Mobile offers a broad range of mobile communications products and services, such as mobile voice and non-voice services (including SMS, picture messaging and entertainment services, such as games, news and music services) delivered over 2 gigabit, 2.5 gigabit and 3 gigabit platforms. Virgin Mobile's network partner is T-Mobile, and Virgin Mobile has a network supply agreement with T-Mobile for a minimum 10-year term from January 2004.

Content Segment

Virgin Media TV and sit-up provide basic (non-premium) television channels and related services to the United Kingdom multi-channel broadcasting market (including to its Cable segment) and a range of consumer products by means of sit-up's auction-based shopping channels. As of December 31, 2008, Virgin Media TV had eight genre-based entertainment channels, including Virgin1, Living, Bravo, Trouble, Challenge and Challenge Jackpot, and additional time-shifted or multiplexed channels, which have identical content to other channels within Virgin Media TV's portfolio but broadcast one hour later. Virgin Media also owns a 50% interest in the companies that comprise the UKTV Group, a series of joint ventures with BBC Worldwide. UKTV has ten channels, including G.O.L.D. and Dave, as well as associated multiplexed channels. The Company also offers Setanta Sports News, a sports news channel available to all of its DTV customers, at no additional cost.

The Company competes with BT Group plc., British Sky Broadcasting Group plc. (BSkyB), Carphone Warehouse Group plc., Tiscali S.p.A., ASDA, Orange, O2, Vodafone, T-Mobile, 3, Tesco Mobile and Carphone Warehouse.