Virgin Media, Inc., through its subsidiaries, engages in the entertainment and communication business providing television, broadband, fixed line telephone, and mobile telephone services in the United Kingdom.
Segments
The company operates in three reportable segments: Cable, Mobile, and Content.
CABLE SEGMENT
The company's cable segment includes the distribution of television programming over its cable network and the provision of broadband and fixed line telephone services to consumers, businesses and public sector organizations, both on its cable network and to an extent off its network. Its residential customers include telesales, online and retail channels.
Consumer
The company provides television, Internet (broadband and dial-up) and fixed line telephone services under the Virgin Media brand to residential customers in the U.K. Its services are distributed via its wholly-owned, cabled local access communications network and are offered to an addressable market of approximately 12.5 million homes. The network covers parts of various major metropolitan areas in England, Wales, Scotland and Northern Ireland. In addition, the company provides broadband and telephone services to residential customers outside of its network via access to other telecommunications networks, referred as ‘off-net’.
Multi-Service Bundles: The company provides triple-play offering of television, broadband and fixed line telephone services. It also provides quad-play of television, broadband, fixed line telephone and mobile telephone services to residential customers.
Cable Television: The company offers a range of digital (DTV), and analog (ATV), television services. As of December 31, 2006, the company provided cable television services to approximately 3.3 million residential customers, of which approximately 3.0 million received its DTV service and approximately 0.3 million received its ATV service. British Sky Broadcasting Group Plc (BSkyB) is a primary supplier of television content to the company.
The company’s DTV service includes access to approximately 130 channels, advanced interactive features, and a range of premium and pay-per-view services. Its ATV service packages offer approximately 60 channels, including premium services. In addition to offering the basic and premium pay TV channels, the company also offers Video on Demand (VoD) services in the U.K. to its DTV customers called Virgin Media ‘On Demand’. The company’s VoD service includes a range of premium movies, music videos and TV programs and series on demand. Sport and special pay-per-view events are also provided through its live event service.
The company offers a range of digital interactive services over an ‘always on’ broadband connection from a customer’s home to the network. Interactive services include games, television email and access to news, entertainment and information services from an on-screen menu. Interactive services also include enhanced television functionality utilizing the ‘red button’ applications from the BBC and other commercial broadcasters.
Video on Demand: The company offers cable-only VoD service to its DTV serviced areas. As of December 31, 2006, approximately 3.0 million existing customers were able to receive the VoD service. Virgin Media ‘On Demand’ service offers viewers’ choice over and above scheduled programming. The VoD service provides access to various hours of additional entertainment for its DTV customers. The service offers DVD-style features, including freeze frame, fast-forward and rewind.
Three primary types of contents are offered within Virgin Media On Demand. A selection of content is offered to watch for free to DTV customers irrespective of package size. This is primarily focused within its ‘catch-up’ TV service which offers a selection of approximately 70 hours of top broadcast TV shows from the previous seven days. Additionally, DTV customers have access to pay-per-transaction content, including approximately 1,000 pay per track music videos and 600 current and library movies provided by ‘FilmFlex’. New movies within this library are offered on VoD up to nine months before they appear on scheduled TV movie channels. Pay-per-transaction programs are offered for 24 hours after purchase. DTV customers that subscribe to its Size XL Virgin TV package have additional access to a subscription VoD, or SVoD, package which includes premium TV shows and music videos.
The company has launched a television channel called ‘Virgin Central’. The channel hosts a continuously refreshing showcase of blockbuster entertainment around the clock. Virgin Central includes free access to hit shows like The OC, Nip/Tuck, Little Britain, Criminal Minds, Grey’s Anatomy, Spooks and West Wing.
Digital Video Recorders and High Definition Television: The company also offers digital video recorders (DVRs). The Virgin Media DVR box, which is called the ‘V+ Box’, is offered to its DTV customer base. The V+ Box has 160 Gigabytes of storage space (up to 80 hours of broadcast TV), 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. Digital video recorders are also known as personal video recorders (PVRs) in the United Kingdom.
Broadband Internet: The company delivers high-speed broadband and dial-up Internet access to customers within reach of its access network by direct connection to its network under the brand name ‘Virgin Broadband’. It offers broadband services at a selection of download speeds: 2Mb for Size M customers, 4Mb for Size L customers and 10Mb for Size XL customers. Premium broadband services (which are free for Size L and XL customers) include advanced security features such as anti-spyware and premium broadband content. As of December 31, 2006, the company provided broadband service to approximately 3.1 million customers on its cable network.
Through its wholly-owned Internet service provider (ISP), the company provides broadband and dial-up Internet services to residential customers who live inside or outside its service areas. As of December 31, 2006, the company had approximately 479,000 residential customers, including approximately 261,000 broadband customers.
Fixed Line Telephone: 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 under the brand name ‘Virgin Phone’. Its basic telephone service include additional services, such as call waiting, call barring (which prevents unauthorized outgoing calls), call diversion (call forwarding), three-way calling, advanced voicemail, caller line identification and fully itemized monthly billing. It also provides national and international directory enquiry services.
The company also offers Size M, L and XL variants of Virgin Phone as alternatives to straight usage-based billing. These packages include ‘Talk Plans’ that enable customers to make unlimited local and national calls for a fixed monthly fee in addition to the standard line rental. As of December 31, 2006, the company provided telephone services to approximately 4.1 million residential customers.
The company also provides phone service through British Telecommunications plc’s (BT) local access network to customers outside of its network. As of December 31, 2006, the company provided off-net telephone services to approximately 38,000 customers.
Business
ntl:Telewest Business focuses on delivering the communications requirements of U.K. public and private sector organizations, as well as those of other service providers. The company’s Business division sales channels are organized to address three markets - business markets, the public sector and service providers. Business Markets focuses on the requirements of the U.K. private sector, from small businesses to large, national corporations. Public Sector channel is divided into vertical segments, including local and central government, education, health and emergency services. Service Provider is also divided into vertical segments, including fixed and mobile network operators and ISPs.
Products and Services
ntl:Telewest Business offers a portfolio of voice and data services, from analog telephony to managed data networks and applications.
Outbound and Inbound Voice: The company offers a suite of voice products ranging from analog and digital services to converged IP telephony solutions.
Converged Solutions: The company’s converged solutions portfolio include its products such as IP VPN. Its network ownership allows the integration of various access technologies, including DSL, synchronous digital hierarchy (SDH), and Ethernet, while multi protocol label switching (MPLS) ensures the priority of services during transmission.
Ethernet: The company offers Ethernet solutions in the United Kingdom. A range of products from local area network extensions to managed wide area Ethernet networks are offered, providing high-bandwidth and flexible solutions.
Applications and Services: As an overlay to network products, the company also offers applications and services, which drive additional value from customer’s communications infrastructure.
MOBILE SEGMENT
The company's mobile segment includes the provision of mobile telephone services under the name Virgin Mobile Holdings (UK) plc (Virgin Mobile) to consumers over cellular networks owned by T-Mobile. Virgin Mobile also uses networks owned by other partners to provide other services. Virgin Mobile had approximately 4.5 million customers as of December 31, 2006.
Virgin Mobile offers a 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 2G, 2.5G and 3G platforms. In addition, Virgin Mobile has launched a mobile TV service, which allows its customers to watch broadcast TV as it happens (including BBC1, ITV1 and Channel 4) on its proprietary TV handsets. This service utilizes the U.K.’s Digital One DAB broadcast network through an agreement with BT Movio, a division of BT. Virgin Mobile offers handsets and/or SIM cards through approximately 5,000 sales outlets in the U.K., including approximately 1,100 specialist shops, concessions located in Virgin Megastores and Virgin Mobile stores, as well as through a range of general retailers, its Web site and its customer care centers. Virgin Mobile’s three existing customer call centers are located in Trowbridge and Middlesbrough in England, and in Johannesburg, South Africa.
CONTENT SEGMENT
The company's content segment includes the operations of its U.K. television channels, such as LivingTV and Bravo, and sit-up’s portfolio of retail television channels. Its content team also oversees the UKTV television channels through its joint ventures with BBC Worldwide.
Through its wholly-owned subsidiaries, Virgin Media Television Limited (Virgin Media TV) and sit-up Limited (sit-up), the company provides basic (non-premium) television channels and related services to the U.K. multi-channel broadcasting market (including to its Cable segment) and various consumer products by means of sit-up’s auction-based shopping channels.
Virgin Media TV has 11 genre-based entertainment channels, including LivingTV, LivingTV2, Bravo, Ftn, Trouble and Challenge TV, and including four ‘multiplexed’ channels which have identical content of another channel but broadcast one hour later. Virgin Media TV also owns a 50% interest in the companies that comprise the UKTV Group, a series of joint ventures with BBC Worldwide. Virgin Media TV and the UKTV Group are suppliers of basic channels to the U.K. pay television market. UKTV has 10 pay channels, including UKTV Gold and UKTV History, and five associated multiplexed channels.
sit-up provides various consumer products through three interactive auction-based television channels: price-drop tv, bid tv and speed auction tv. These channels are offered on its own digital platforms, BSkyB’s digital platform and Freeview, as well as on the Internet.
Competition
Cable Segment
Consumer: The company's competitors include BT Group plc, British Sky Broadcasting Group plc; Carphone Warehouse Group plc; Tiscali S.p.A.; Orange; Pipex Communications plc.; Vodafone and O2.
Cable Television: The company competes primarily with BSkyB in providing pay DTV to residential customers in the U.K. It also competes with Top Up TV; Video Networks Limited; and Kingston Interactive Television.
Broadband Internet: The company’s internet services compete with BT. It also competes with Carphone Warehouse (TalkTalk), Orange, Tiscali and BSkyB.
Fixed Line Telephone: The company competes primarily with BT in providing telephone services to residential customers in the U.K. It also competes with other telecommunications companies that provide indirect access telephone services, including Carphone Warehouse under the brand name TalkTalk, Pipex, Tesco and BSkyB. It also competes with independent providers, such as Vonage and Skype.
Business: The company's competitors include BT, Vanco plc (Vanco), Affiniti, a trading name of Kingston Communications (Hull) Plc, and COLT Telecom Group plc. It also competes with Cable & Wireless plc (C&W) and Thus plc.
Mobile Segment
The company's competitors are the other mobile communication providers in the U.K., including O2, Vodafone, Orange, T-Mobile and 3. It also competes with BT Mobile, Carphone Warehouse and Tesco Mobile.
Content Segment
Virgin Media TV competes with ITV1 and Channel 4.
History
The company was founded in 1993. It was formerly known as NTL Incorporated and changed its name to Virgin Media, Inc. in February 2007.
