10-K 1 lgi201310-k.htm 10-K LGI 2013 10-K

 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-K
þ
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended December 31, 2013
OR 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from                     to                    
Commission file number 001-35961
Liberty Global plc
(Exact name of Registrant as specified in its charter)
England and Wales
 
98-1112770
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
 
38 Hans Crescent, London, England
 
SW1X 0LZ
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: +44.20.7190.6449 or 303.220.6600
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
 
Name of Each Exchange on Which Registered
Class A Ordinary Share, par value $0.01 per share
 
NASDAQ Global Select Market
Class B Ordinary Shares, par value $0.01 per share
 
NASDAQ Global Select Market
Class C Ordinary Shares, par value $0.01 per share
 
NASDAQ Global Select Market
Securities registered pursuant to Section 12(g) of the Act: none
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  þ        No  ¨
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨        No  þ
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ        No  ¨
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months.    Yes  þ        No  ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer, accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Check one:
Large Accelerated Filer  þ
 
Accelerated Filer  ¨
 
Non-Accelerated Filer  ¨
 
Smaller Reporting Company  ¨
Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes ¨ No þ
State the aggregate market value of the voting and non-voting common equity held by non-affiliates, computed by reference to the price at which the common equity was last sold, or the average bid and ask price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $27.3 billion.
The number of outstanding ordinary shares of Liberty Global plc as of February 7, 2014 was: 222,111,115 Class A ordinary shares; 10,147,184 Class B ordinary shares; and 161,089,629 Class C ordinary shares.

DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive proxy statement for the Registrant’s 2014 Annual General Meeting of Shareholders are incorporated by reference in Part III of this Form 10-K.
 



LIBERTY GLOBAL PLC
2013 ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS
 
 
 
Page
Number
 
PART I
 
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
Mine Safety Disclosures
 
 
 
 
PART II
 
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
 
 
 
 
PART III
 
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
 
 
 
 
PART IV
 
Item 15.





PART I
Item 1.    BUSINESS
General Development of Business
Liberty Global plc (Liberty Global) is an international provider of video, broadband internet, fixed-line telephony and mobile services, with consolidated operations at December 31, 2013, serving 24.5 million customers across 14 countries. Through Virgin Media Inc. (Virgin Media) and Unitymedia KabelBW GmbH (Unitymedia KabelBW), each a wholly-owned subsidiary, and Telenet Group Holding NV (Telenet), a 57.4%-owned subsidiary, we provide video, broadband internet, fixed-line telephony and mobile services in the United Kingdom (U.K.), Germany and Belgium, respectively. Through UPC Holding BV (UPC Holding), also a wholly-owned subsidiary, we provide video, broadband internet and fixed-line telephony services in nine European countries and mobile services in three European countries. The operations of Virgin Media, Unitymedia KabelBW, Telenet and the broadband communications and direct-to-home satellite (DTH) operations of UPC Holding are collectively referred to herein as the “European Operations Division”. Our broadband communications operations in Chile are provided through our 80%-owned subsidiary, VTR GlobalCom SpA (VTR GlobalCom), formerly known as VTR GlobalCom S.A. Through our 80%-owned subsidiary, VTR Wireless SpA (VTR Wireless), formerly known as VTR Wireless S.A., we also offer mobile services in Chile. Our operations also include (1) consolidated broadband communications operations in Puerto Rico that we conduct through a 60%-owned subsidiary, Liberty Cablevision of Puerto Rico (Liberty Puerto Rico), and (2) investments in various other businesses, primarily in Europe. At December 31, 2013, we owned programming interests in Europe and Latin America that were held through Chellomedia BV (Chellomedia). Certain of Chellomedia’s subsidiaries and affiliates provided programming services to certain of our broadband communications operations, primarily in Europe. On January 31, 2014, we completed the sale of substantially all of Chellomedia’s assets.
As further described below, as a result of a series of mergers that were completed on June 7, 2013, Liberty Global became the publicly-held parent company of the successors by merger of Liberty Global, Inc. (LGI) (the predecessor to Liberty Global) and Virgin Media. In the following text, the terms “we,” “our,” “our company,” and “us” may refer, as the context requires, to Liberty Global (or its predecessor) or collectively to Liberty Global (or its predecessor) and its subsidiaries.
Unless otherwise indicated, convenience translations into United States (U.S.) dollars are calculated as of December 31, 2013, and operational data, including subscriber statistics and ownership percentages, are as of December 31, 2013.
Recent Developments
Virgin Media Acquisition
On June 7, 2013, pursuant to an Agreement and Plan of Merger (the Virgin Media Merger Agreement) with Virgin Media and following receipt of regulatory and shareholder approvals, we acquired Virgin Media in a stock and cash merger (the Virgin Media Acquisition).
Pursuant to the Virgin Media Merger Agreement:
each share of common stock of Virgin Media was converted into the right to receive (a) 0.2582 Class A ordinary shares of Liberty Global, (b) 0.1928 Class C ordinary shares of Liberty Global and (c) $17.50 in cash; and
each share of Series A common stock of LGI was converted into the right to receive one Class A ordinary share of Liberty Global, each share of Series B common stock of LGI was converted into the right to receive one Class B ordinary share of Liberty Global, and each share of Series C common stock of LGI was converted into the right to receive one Class C ordinary share of Liberty Global.
In connection with the completion of the Virgin Media Acquisition, we issued 70,233,842 Class A and 52,444,170 Class C ordinary shares to holders of Virgin Media common stock and 141,234,331 Class A, 10,176,295 Class B and 105,572,797 Class C ordinary shares to holders of LGI Series A, Series B and Series C common stock, respectively.
For additional information on the Virgin Media Acquisition, including related financings, see notes 3, 6, and 9 to our consolidated financial statements included in Part II of this Annual Report.
Ziggo Acquisitions
During 2013, we acquired an aggregate of 57,000,738 shares of Ziggo N.V. (Ziggo), a publicly-traded company in the Netherlands, at an average price of €26.40 ($36.40) per share, for a total investment of €1,505.0 million ($2,075.3 million). Ziggo

I-3



is the largest cable operator in the Netherlands in terms of customers. As a result of these investments, we effectively owned 28.5% of the outstanding shares of Ziggo at December 31, 2013. In April 2013, we entered into a limited recourse margin loan agreement with respect to a portion of our investment in Ziggo, and in July 2013, we entered into a share collar and secured borrowing arrangement with respect to a portion of our owned Ziggo shares. All but 4,743,738 of the Ziggo shares that we owned at December 31, 2013 were pledged as collateral under one of these two arrangements.
On January 27, 2014, we reached an agreement on an offer to acquire all of the shares of Ziggo that we do not already own (the Ziggo Offer) in a stock and cash transaction. The supervisory and management boards of Ziggo have recommended that the shareholders of Ziggo accept the Ziggo Offer. Under the terms of the Ziggo Offer, Ziggo shareholders will receive (1) 0.2282 Class A ordinary shares of Liberty Global, (2) 0.1674 Class C ordinary shares of Liberty Global (or 0.5630 Class C ordinary shares of Liberty Global after the completion of the 2014 Share Dividend, as defined and described in note 19 to our consolidated financial statements included in Part II of this Annual Report), and (3) €11.00 ($15.17) in cash for each Ziggo share that they own. The completion of the Ziggo Offer is subject to customary closing conditions, including a minimum tender condition and receipt of competition clearances.

For additional information on the above Ziggo transactions, including related financings, see notes 5, 6, 9 and 19 to our consolidated financial statements included in Part II of this Annual Report.

In addition, during 2013, we completed various other smaller acquisitions in the normal course of business.

Financings
VTR Financing Transactions. On January 24, 2014, we completed a reorganization of our credit pools. VTR GlobalCom and VTR Wireless were placed in a separate credit pool with their parent and one of our wholly-owned subsidiaries, VTR Finance B.V. (VTR Finance). In connection with the reorganization, VTR Finance and certain of its subsidiaries (including VTR GlobalCom) were extracted from the UPC Holding credit pool and VTR Finance and certain of its subsidiaries entered into the financing transactions described below. In connection with these transactions, we disclosed that we are exploring opportunities with respect to our Latin American operations (which include VTR GlobalCom, VTR Wireless and Liberty Puerto Rico), including a possible spin-off of those operations to our shareholders. Our evaluation of such opportunities is at a preliminary stage, and any alternative pursued would be subject to approval by our board of directors. We are unable to predict the timing or terms of any spin-off or other transaction that might be pursued, or whether such a transaction will eventually occur. On January 24, 2014, VTR Finance issued $1.4 billion principal amount of 6.875% senior secured notes due January 15, 2024 (the VTR Senior Secured Notes). The net proceeds from the issuance of the VTR Senior Secured Notes were used, together with existing cash of our subsidiaries, to repay all of the outstanding indebtedness under Facilities R, S and AE of the senior secured credit facility of UPC Broadband Holding BV, a wholly-owned subsidiary of UPC Holding, in connection with the extraction of VTR Finance and its subsidiaries from the UPC Holding credit pool.
Virgin Media Credit Facility. In connection with the execution of the Virgin Media Merger Agreement, we entered into various debt financing arrangements. On June 7, 2013, Virgin Media Investment Holdings Limited, a subsidiary of Virgin Media, together with other subsidiaries of Virgin Media as borrowers and guarantors, entered into a new senior secured credit facility agreement. Under the agreement, the lenders agreed to provide the borrowers with (1) a £375.0 million ($621.3 million) term loan, (2) a $2,755.0 million term loan, (3) a £600.0 million ($994.0 million) term loan and (4) a £660.0 million ($1,093.4 million) revolving credit facility. With the exception of the revolving credit facility, all available amounts were borrowed in June 2013.
Virgin Media Notes. In February 2013, also in connection with the execution of the Virgin Media Merger Agreement, certain of our subsidiaries issued $1.0 billion principal amount of 5.375% senior secured notes and £1.1 billion ($1.8 billion) principal amount of 6.0% senior secured notes; and $530.0 million principal amount of 6.375% senior notes and £250.0 million ($414.2 million) principal amount of 7.0% senior notes. The net proceeds (after deducting certain transaction expenses) of these notes were placed into escrow pending the closing of the Virgin Media Acquisition at which time they were released.
Virgin Media Convertible Notes. Prior to the Virgin Media Acquisition, Virgin Media issued $1.0 billion principal amount of 6.50% convertible senior notes (the VM Convertible Notes) pursuant to an indenture, as supplemented. The VM Convertible Notes mature on November 15, 2016, unless the VM Convertible Notes are exchanged or repurchased prior thereto pursuant to the terms the indenture. As of December 31, 2013, an aggregate of $944.2 million principal amount of VM Convertible Notes had been exchanged following the Virgin Media Acquisition for 13.1 million Class A and 9.8

I-4



million Class C ordinary shares and $885.1 million of cash. After giving effect to all exchanges completed, the remaining principal amount outstanding under the VM Convertible Notes was $54.8 million as of December 31, 2013.
For a further description of the terms of the above financings, including call provisions, and certain other transactions affecting our consolidated debt in 2013, see notes 9 and 19 to our consolidated financial statements included in Part II of this Annual Report.
Equity Transactions
Share Repurchases. Pursuant to our various share repurchase programs, during 2013 we repurchased a total of 6,550,197 shares of Liberty Global Class A ordinary shares or LGI Series A common stock at a weighted average price of $73.82 per share and 9,105,600 shares of Liberty Global Class C ordinary shares or LGI Series C common stock at a weighted average price of $73.41 per share, for an aggregate cash purchase price of $1,151.9 million, including direct acquisition costs and the effects of derivative instruments. On June 11, 2013, our board of directors authorized a new program of up to $3.5 billion (before direct acquisition costs) for the repurchase of Liberty Global Class A and/or Class C ordinary shares, through open market or privately negotiated transactions, which may include derivative transactions. The timing of the repurchase of shares pursuant to this program is dependent on a variety of factors, including market conditions. This program may be suspended or discontinued at any time. At December 31, 2013, the remaining amount authorized for share repurchases was $2,522.1 million. In conjunction with our share repurchase program, we entered into a number of call option contracts during 2013. Subsequent to December 31, 2013, our board of directors increased the amount authorized under our current repurchase program by $1.0 billion. We currently intend to complete this repurchase program by the end of 2015.
For a further description of our share repurchases and the call option contracts, see note 11 to our consolidated financial statements included in Part II of this Annual Report.
* * * *
Certain statements in this Annual Report on Form 10-K constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. To the extent that statements in this Annual Report are not recitations of historical fact, such statements constitute forward-looking statements, which, by definition, involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. In particular, statements under Item 1. Business, Item 1A. Risk Factors, Item 2. Properties, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 7A. Quantitative and Qualitative Disclosures About Market Risk may contain forward-looking statements, including statements regarding our expectations with respect to our growth prospects and our strategic initiatives over the next few years, our expectations regarding our operating cash flow margins and percentage of revenue represented by our property and equipment additions in 2014, the amount of our anticipated non-functional currency transactions in 2014, the future projected cash flows of our continuing operations associated with our commitments and derivative instruments, our business, product, foreign currency and finance strategies, our property and equipment additions, subscriber growth and retention rates, competitive, regulatory and economic factors, the maturity of our markets, anticipated cost increases, liquidity, credit risks, foreign currency risks and target leverage levels. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. In evaluating these statements, you should consider the risks and uncertainties discussed under Item 1A. Risk Factors and Item 7A. Quantitative and Qualitative Disclosures About Market Risk, as well as the following list of some but not all of the factors that could cause actual results or events to differ materially from anticipated results or events:
economic and business conditions and industry trends in the countries in which we operate;
the competitive environment in the industries in the countries in which we operate, including competitor responses to our products and services;
fluctuations in currency exchange rates and interest rates;
instability in global financial markets, including sovereign debt issues and related fiscal reforms;
consumer disposable income and spending levels, including the availability and amount of individual consumer debt;
changes in consumer television viewing preferences and habits;

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consumer acceptance of our existing service offerings, including our digital video, broadband internet, fixed-line telephony, mobile and business service offerings, and of new technology, programming alternatives and other products and services that we may offer in the future;
our ability to manage rapid technological changes;
our ability to maintain or increase the number of subscriptions to our digital video, broadband internet, fixed-line telephony and mobile service offerings and our average revenue per household;
our ability to provide satisfactory customer service, including support for new and evolving products and services;
our ability to maintain or increase rates to our subscribers or to pass through increased costs to our subscribers;
our ability to maintain our revenue from channel carriage arrangements, particularly in Germany;
the impact of our future financial performance, or market conditions generally, on the availability, terms and deployment of capital;
changes in, or failure or inability to comply with, government regulations in the countries in which we operate and adverse outcomes from regulatory proceedings;
government intervention that opens our broadband distribution networks to competitors, such as the obligations imposed in Belgium;
our ability to obtain regulatory approval and satisfy other conditions necessary to close acquisitions and dispositions and the impact of conditions imposed by competition and other regulatory authorities in connection with acquisitions, including the impact of the present and any future conditions imposed in connection with the acquisition of Kabel BW GmbH (KBW) on our operations in Germany;
our ability to successfully acquire new businesses and, if acquired, to integrate, realize anticipated efficiencies from, and implement our business plan with respect to, the businesses we acquire, such as the Virgin Media Acquisition and the recently announced Ziggo Offer;
changes in laws or treaties relating to taxation, or the interpretation thereof, in the U.S. or in countries in which we operate;
changes in laws and government regulations that may impact the availability and cost of credit and the derivative instruments that hedge certain of our financial risks;
the ability of suppliers and vendors to timely deliver quality products, equipment, software and services;
the availability of attractive programming for our digital video services and the costs associated with such programming, including retransmission and copyright fees payable to public and private broadcasters;
uncertainties inherent in the development and integration of new business lines and business strategies;
our ability to adequately forecast and plan future network requirements;
the availability of capital for the acquisition and/or development of telecommunications networks and services;
problems we may discover post-closing with the operations, including the internal controls and financial reporting process, of businesses we acquire;
leakage of sensitive customer data;
the outcome of any pending or threatened litigation;
the loss of key employees and the availability of qualified personnel;
changes in the nature of key strategic relationships with partners and joint venturers; and
events that are outside of our control, such as political unrest in international markets, terrorist attacks, malicious human acts, natural disasters, pandemics and other similar events.

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The broadband distribution services industries are changing rapidly and, therefore, the forward-looking statements of expectations, plans and intent in this Annual Report are subject to a significant degree of risk. These forward-looking statements and the above-described risks, uncertainties and other factors speak only as of the date of this Annual Report, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based. Readers are cautioned not to place undue reliance on any forward-looking statement.
Financial Information About Operating Segments
Financial information about our reportable segments appears in note 17 to our consolidated financial statements included in Part II of this Annual Report.
Narrative Description of Business
Broadband Distribution
Overview
We offer a variety of broadband services over our cable distribution systems, including video, broadband internet and fixed-line telephony, and in certain of our operations we offer mobile services. We design these services to enable our customers to access the digital world on their own terms and at their own pace. In most of our footprint, the core of our offer to customers is “triple-play”, which we use to describe bundled services of digital video, internet and fixed-line telephony in one subscription. We are enhancing this offer with the development of “quadruple-play” by expanding our services to include mobile. Available service offerings depend on the bandwidth capacity of a particular system and whether it has been upgraded for two-way communications. In select markets, we also offer video services through DTH or through multichannel multipoint (microwave) distribution systems (MMDS). Our consumer brands include Virgin Media, UPC, Unitymedia, Kabel BW, Telenet, VTR GlobalCom and in Puerto Rico, Liberty. In terms of video subscribers, we operate the largest cable network in each of Austria, Belgium, Chile, the Czech Republic, Hungary, Ireland, Poland, Puerto Rico, Slovakia, Switzerland and the U.K. and the second largest cable network in each of Germany, the Netherlands and Romania.

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The following table presents certain operating data as of December 31, 2013, with respect to the cable, DTH and MMDS systems of our subsidiaries in Europe, Chile and Puerto Rico. This table reflects 100% of the operational data applicable to each subsidiary regardless of our ownership percentage.



Consolidated Operating Data
at December 31, 2013
 
 
 
Homes
Passed
(1)
 
Two-way
Homes
Passed
(2)
 
Customer
Relationships
(3)
 
Total
RGUs
(4)
 
Video
 
Internet
 
Fixed-line Telephony
Analog Cable Subscribers
(5)
 
Digital
Cable
Subscribers
(6)
 
DTH
Subscribers
(7)
 
MMDS
Subscribers
(8)
 
Total
Video
 
Subscribers
(9)
 
Subscribers
(10)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
European Operations Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
United Kingdom
 
12,520,100

 
12,520,100

 
4,908,500

 
12,261,700

 

 
3,749,600

 

 

 
3,749,600

 
4,375,700

 
4,136,400

Germany
 
12,634,300

 
12,295,200

 
7,069,800

 
11,698,500

 
4,366,500

 
2,234,900

 

 

 
6,601,400

 
2,579,600

 
2,517,500

Belgium
 
2,893,800

 
2,893,800

 
2,092,500

 
4,622,400

 
601,100

 
1,491,400

 

 

 
2,092,500

 
1,464,900

 
1,065,000

The Netherlands (11)
 
2,838,600

 
2,825,300

 
1,633,900

 
3,683,000

 
523,900

 
1,108,100

 

 

 
1,632,000

 
1,068,100

 
982,900

Switzerland (11)
 
2,145,300

 
1,875,100

 
1,455,200

 
2,538,700

 
764,700

 
651,700

 

 

 
1,416,400

 
663,800

 
458,500

Austria
 
1,326,000

 
1,326,000

 
642,700

 
1,304,500

 
181,400

 
342,800

 

 

 
524,200

 
432,100

 
348,200

Ireland
 
859,600

 
748,600

 
533,000

 
1,059,700

 
51,100

 
338,300

 

 
38,500

 
427,900

 
338,300

 
293,500

Total Western Europe
 
35,217,700

 
34,484,100

 
18,335,600

 
37,168,500

 
6,488,700

 
9,916,800

 

 
38,500

 
16,444,000

 
10,922,500

 
9,802,000

Poland
 
2,717,700

 
2,616,300

 
1,436,600

 
2,673,000

 
387,000

 
848,300

 

 

 
1,235,300

 
915,900

 
521,800

Hungary
 
1,539,300

 
1,524,000

 
1,050,800

 
1,862,600

 
257,300

 
376,900

 
264,600

 

 
898,800

 
518,300

 
445,500

Romania
 
2,272,600

 
2,080,300

 
1,188,300

 
1,842,900

 
364,100

 
477,700

 
341,000

 

 
1,182,800

 
381,000

 
279,100

Czech Republic
 
1,359,400

 
1,257,700

 
725,600

 
1,189,000

 
81,600

 
379,200

 
106,800

 

 
567,600

 
440,000

 
181,400

Slovakia
 
501,200

 
478,300

 
287,600

 
431,200

 
59,100

 
133,000

 
66,500

 
600

 
259,200

 
109,400

 
62,600

Total Central and Eastern Europe
 
8,390,200

 
7,956,600

 
4,688,900

 
7,998,700

 
1,149,100

 
2,215,100

 
778,900

 
600

 
4,143,700

 
2,364,600

 
1,490,400

Total European Operations Division
 
43,607,900

 
42,440,700

 
23,024,500

 
45,167,200

 
7,637,800

 
12,131,900

 
778,900

 
39,100

 
20,587,700

 
13,287,100

 
11,292,400

Chile
 
2,927,300

 
2,406,100

 
1,199,800

 
2,564,800

 
134,800

 
854,600

 

 

 
989,400

 
885,700

 
689,700

Puerto Rico
 
704,600

 
704,600

 
272,800

 
535,800

 

 
210,500

 

 

 
210,500

 
192,200

 
133,100

Grand Total
 
47,239,800

 
45,551,400

 
24,497,100

 
48,267,800

 
7,772,600

 
13,197,000

 
778,900

 
39,100

 
21,787,600

 
14,365,000

 
12,115,200


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___________________
(1)
Homes Passed are homes, residential multiple dwelling units or commercial units that can be connected to our networks without materially extending the distribution plant, except for DTH and MMDS homes. Our Homes Passed counts are based on census data that can change based on either revisions to the data or from new census results. We do not count homes passed for DTH. With respect to MMDS, one MMDS customer is equal to one Home Passed. Due to the fact that we do not own the partner networks (defined below) used in Switzerland and the Netherlands (see note 11 below), we do not report homes passed for Switzerland’s and the Netherlands’ partner networks.
(2)
Two-way Homes Passed are Homes Passed by those sections of our networks that are technologically capable of providing two-way services, including video, internet and fixed-line telephony services.
(3)
Customer Relationships are the number of customers who receive at least one of our video, internet or fixed-line telephony services that we count as Revenue Generating Units (RGUs), without regard to which or to how many services they subscribe. To the extent that RGU counts include equivalent billing unit (EBU) adjustments, we reflect corresponding adjustments to our Customer Relationship counts. For further information regarding our EBU calculation, see Additional General Notes to Tables below. Customer Relationships generally are counted on a unique premises basis. Accordingly, if an individual receives our services in two premises (e.g., a primary home and a vacation home), that individual generally will count as two Customer Relationships. We exclude mobile customers from Customer Relationships. For Belgium, Customer Relationships only include customers who subscribe to an analog or digital cable service due to billing system limitations.
(4)
Revenue Generating Unit is separately an Analog Cable Subscriber, Digital Cable Subscriber, DTH Subscriber, MMDS Subscriber, Internet Subscriber or Fixed-line Telephony Subscriber. A home, residential multiple dwelling unit, or commercial unit may contain one or more RGUs. For example, if a residential customer in our Austrian system subscribed to our digital cable service, fixed-line telephony service and broadband internet service, the customer would constitute three RGUs. Total RGUs is the sum of Analog Cable, Digital Cable, DTH, MMDS, Internet and Fixed-line Telephony Subscribers. RGUs generally are counted on a unique premises basis such that a given premises does not count as more than one RGU for any given service. On the other hand, if an individual receives one of our services in two premises (e.g., a primary home and a vacation home), that individual will count as two RGUs for that service. Each bundled cable, internet or fixed-line telephony service is counted as a separate RGU regardless of the nature of any bundling discount or promotion. Non-paying subscribers are counted as subscribers during their free promotional service period. Some of these subscribers may choose to disconnect after their free service period. Services offered without charge on a long-term basis (e.g., VIP subscribers, free service to employees) generally are not counted as RGUs. We do not include subscriptions to mobile services in our externally reported RGU counts. In this regard, our December 31, 2013 RGU counts exclude our separately reported postpaid and prepaid mobile subscribers in the U.K., Belgium, Germany, Chile, Poland, Hungary and the Netherlands of 2,990,200, 750,500, 239,500, 71,300, 16,500, 7,700 and 3,000, respectively. Our mobile subscriber count represents the number of active subscriber identification module (SIM) cards in service.
(5)
Analog Cable Subscriber is a home, residential multiple dwelling unit or commercial unit that receives our analog cable service over our broadband network. Our Analog Cable Subscriber counts also include subscribers who may use a purchased set-top box or other means to receive our basic digital cable channels without subscribing to any services that would require the payment of recurring monthly fees in addition to the basic analog service fee (Basic Digital Cable Subscriber). Our Basic Digital Cable Subscribers are attributable to the fact that our basic digital cable channels are not encrypted in certain portions of our footprint and the use of purchased digital set-top boxes in Belgium. In Europe, we have approximately 108,100 “lifeline” customers that are counted on a per connection basis, representing the least expensive regulated tier of video cable service, with only a few channels.
(6)
Digital Cable Subscriber is a home, residential multiple dwelling unit or commercial unit that receives our digital cable service over our broadband network or through a partner network. We count a subscriber with one or more digital converter boxes that receives our digital cable service in one premises as just one subscriber. A Digital Cable Subscriber is not counted as an Analog Cable Subscriber. As we migrate customers from analog to digital cable services, we report a decrease in our Analog Cable Subscribers equal to the increase in our Digital Cable Subscribers. As discussed in further detail in note 5 above, Basic Digital Cable Subscribers are not included in the respective Digital Cable Subscriber counts. Subscribers to digital cable services provided by our operations in Switzerland and the Netherlands over partner networks receive analog cable services from the partner networks as opposed to our operations.
(7)
DTH Subscriber is a home, residential multiple dwelling unit or commercial unit that receives our video programming broadcast directly via a geosynchronous satellite.
(8)
MMDS Subscriber is a home, residential multiple dwelling unit or commercial unit that receives our video programming via MMDS.
(9)
Internet Subscriber is a home, residential multiple dwelling unit or commercial unit that receives internet services over our networks, or that we service through a partner network. Our Internet Subscribers exclude 134,800 asymmetric digital subscriber line (ADSL) subscribers within our U.K. segment and 73,800 digital subscriber line (DSL) subscribers within our Austria segment that are not serviced over our networks. Our Internet Subscribers do not include customers that receive services from dial-up connections. In Switzerland, we offer a 2 Mbps internet service to our Analog and Digital Cable Subscribers without an incremental recurring fee. Our Internet Subscribers in Switzerland include 27,600 subscribers who have requested and received a modem that enables the receipt of this 2 Mbps internet service.

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(10)
Fixed-line Telephony Subscriber is a home, residential multiple dwelling unit or commercial unit that receives voice services over our networks, or that we service through a partner network. Fixed-line Telephony Subscribers exclude mobile telephony subscribers. Our Fixed-line Telephony Subscribers exclude 94,800 and 53,700 subscribers within our segments in the U.K. and Austria, respectively, that are not serviced over our networks.
(11)
Pursuant to service agreements, Switzerland and, to a much lesser extent, the Netherlands offer digital cable, broadband internet and fixed-line telephony services over networks owned by third-party cable operators (partner networks). A partner network RGU is only recognized if there is a direct billing relationship with the customer. At December 31, 2013, Switzerland’s partner networks account for 131,700 Customer Relationships, 261,500 RGUs, 98,200 Digital Cable Subscribers, 95,200 Internet Subscribers and 68,100 Fixed-line Telephony Subscribers.
Additional General Notes to Table:
All of our broadband communications subsidiaries provide fixed-line telephony, broadband internet, data, video or other business services. Certain of our business service revenue is derived from small or home office (SOHO) subscribers that pay a premium price to receive enhanced service levels along with video, internet or fixed-line telephony services that are the same or similar to the mass marketed products offered to our residential subscribers. All mass marketed products provided to SOHOs, whether or not accompanied by enhanced service levels and/or premium prices, are included in the respective RGU and customer counts of our broadband communications operations, with only those services provided at premium prices considered to be “SOHO RGUs” or “SOHO customers.” With the exception of our business SOHO subscribers, we generally do not count customers of business services as customers or RGUs for external reporting purposes.
Certain of our residential and commercial RGUs are counted on an EBU basis, including residential multiple dwelling units and commercial establishments, such as bars, hotels and hospitals, in Chile and Puerto Rico and certain commercial establishments in Europe (with the exception of Germany and Belgium, where we do not count any RGUs on an EBU basis). Our EBUs are generally calculated by dividing the bulk price charged to accounts in an area by the most prevalent price charged to non-bulk residential customers in that market for the comparable tier of service. As such, we may experience variances in our EBU counts solely as a result of changes in rates. In Germany, homes passed reflect the footprint, and two-way homes passed reflect the technological capability of our network up to the street cabinet, with drops from the street cabinet to the building generally added, and in-home wiring generally upgraded, on an as needed or success-based basis. In Belgium, Telenet leases a portion of its network under a long-term capital lease arrangement. These tables include operating statistics for Telenet’s owned and leased networks.
While we take appropriate steps to ensure that subscriber statistics are presented on a consistent and accurate basis at any given balance sheet date, the variability from country to country in (1) the nature and pricing of products and services, (2) the distribution platform, (3) billing systems, (4) bad debt collection experience and (5) other factors add complexity to the subscriber counting process. We periodically review our subscriber counting policies and underlying systems to improve the accuracy and consistency of the data reported on a prospective basis. Accordingly, we may from time to time make appropriate adjustments to our subscriber statistics based on those reviews.
Subscriber information for acquired entities is preliminary and subject to adjustment until we have completed our review of such information and determined that it is presented in accordance with our policies.


I-10



Residential Services

Video. Our cable operations offer a full range of video services, including basic and premium programming, which can be accessed on the television and, in select markets, through internet connected devices in the home and whenever there is internet connectivity. We provide advanced service offerings, such as high definition (HD) channels, digital video recorder (DVR), HD DVR and, in certain markets, video-on-demand (VoD), which give our customers the ability to control when they watch their programming. In several of our markets, we also have enhanced pay-per-view programming on channels we distribute and through VoD. In addition, we offer select programming in three-dimensional (3D) format to our customers who have 3D capable televisions. Several of our operations offer television applications (apps) that allow access to programming on a variety of devices, including laptops and tablets.
To receive our digital services, a subscriber must either purchase or rent a set-top box, and obtain a conditional access security card, or a “smart card,” from our operators. Neither a set-top box nor a smart card is required to receive basic digital television channels in our unencrypted footprints. Accordingly, where our basic digital television channels are unencrypted, subscribers are able to also watch our basic digital television channels, provided that they pay the monthly subscription fee for our analog package and have televisions capable of receiving digital signals. The basic digital television channels in our entire footprints in Germany, the Netherlands, Switzerland, Austria, Poland, the Czech Republic and Romania are unencrypted as of December 31, 2013. It is possible that we will decide to unencrypt the digital versions of our basic analog tier in additional markets in 2014 and future periods. Regardless of whether basic digital channels are offered on an unencrypted basis, expanded channel packages and premium channels and services continue to be available for an incremental monthly fee in all of our markets.
In some of our markets, in lieu of a set-top box, a subscriber may use a common interface plus (CI+) module in combination with a smart card to access our encrypted digital services. A CI+ module is a small device that allows customers with a CI+ enabled television set, who subscribe to, or otherwise have access to, our digital video service, to view such services without a set-top box. No set-top box, CI+ module or smart card is required to receive our analog or unencrypted basic digital services.
To enhance our customers video experience, we have launched “Horizon TV”, a next generation multimedia home gateway, in Germany, the Netherlands, Switzerland and Ireland. As described further below, Horizon TV is a home multimedia platform with a sophisticated user interface that enables customers to view and share content across the television, computer, tablet and smartphone. Similar video experiences are offered by us through the “TiVo” platform in the U.K. and “Yelo TV” in Belgium.
Our cable operations generally offer two or three tiers of digital video programming and audio services. Subscribers to our basic digital video service pay a fixed monthly fee and generally receive at least 60 video channels and several audio services. This service also includes VoD access and an electronic programming guide. In our markets where our basic digital service is not encrypted, the cost of our digital service is the same cost as our analog services. In the markets where we encrypt our basic digital service, such service is generally offered at an incremental cost equal to or slightly higher than the monthly fee for our basic analog service. For an additional monthly charge, a subscriber may upgrade to one of our extended digital tier services and receive an increased number of video channels, including the channels in the basic tier service. A limited number of HD channels are generally included in our basic tiers of service. Digital subscribers may also subscribe to one or more packages of premium channels, including additional HD channels. In all digital tiers of service, a subscriber also has the option for an incremental monthly charge to upgrade the standard digital device to one with DVR or HD DVR capabilities, which may be rented or purchased. Customers who subscribe to a digital tier generally receive a VoD enabled set top box without an additional monthly charge. Our VoD services are available on a subscription basis or a transaction basis, depending on location and the tier of digital service selected by the subscriber.
In addition to our digital video services, we offer limited analog services in all of our broadband markets, except in the U.K. and in Puerto Rico. Subscribers to our analog video service typically receive 18 to 67 channels of video service, depending on their location. Subscribers to our digital services also receive the channels available through our analog service. In certain of our markets, we offer a lifeline tier with limited video channels. In Ireland and Slovakia, we offer a limited number of video channels through MMDS.
Discounts to our monthly service fees are available to any subscriber who selects a bundle of two or more of our services (bundled services): video, internet, fixed-line telephony and, in certain markets, mobile services. Bundled services consist of “double-play” for two services, “triple-play” for three services and “quadruple-play” for four services.

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We tailor our tiers of video services in each country of operation based on programming preferences, culture, demographics and local regulatory requirements. Our channel offerings include general entertainment, sports, movies, documentaries, lifestyles, news, adult, children, and ethnic and foreign channels. In each of our markets, we also offer a variety of premium channel packages (such as sports, family and international focus) and our VoD service provides a wide variety of movies and special events to meet the special interests of our subscribers. In all of our broadband operations we continue to upgrade our systems to expand our digital services and encourage our analog subscribers to convert to a digital or premium digital service.
We offer digital video services through DTH satellite in the Czech Republic, Hungary, Romania and Slovakia. We offer these services through UPC DTH S.á.r.l (UPC DTH), a subsidiary of Liberty Global Europe organized in Luxembourg, which also has a management arrangement with another subsidiary, FocusSat Romania Srl (FocusSat), to provide these services in Romania. Similar to our video cable services, we offer a lifeline tier of service (excluding Romania), a basic video tier of service and, for an additional monthly charge, subscribers may upgrade to an extended tier of service and may subscribe to various premium channel packages.
Broadband Internet. We offer multiple tiers of broadband internet service in all of our broadband communications markets. Depending on location, this service includes download speeds ranging from less than 1 Mbps to an ultra high-speed internet service of 250 Mbps. Generally, we provide our broadband internet service without any time or data volume restrictions. Our current core package in most of our Europe operations offers a speed of 120 Mbps, with our operations in the Netherlands, Austria, Ireland, Poland, Hungary, the Czech Republic and Romania offering additional packages with download speeds ranging from up to 200 Mbps to 250 Mbps. To a select market in Switzerland, we also have available an ultra high-speed internet service with download speeds of up to 500 Mbps. Our ultra high-speed internet service is based primarily on Euro DOCSIS 3.0 technology. Our internet service generally includes email, address book, parental controls and on-line audio. We also offer value-added broadband services through certain of our operations for an incremental charge. These services include security (e.g., anti-virus and spam protection) and online storage and web spaces. In certain of our markets, we offer mobile broadband services as described under —Telephony below.
Our residential subscribers generally access the internet via cable modems connected to their internet capable devices, including personal computers, at various speeds depending on the tier of service selected. This standard means of access is changing as we expand our services to offer wireless networks for the home. In certain of our markets, we are deploying a community WiFi in the home (Community WiFi), which provides a seamless connectivity experience over WiFi to our customers. The Community WiFi is branded as “Wi-free” in Belgium, Poland, Switzerland and Ireland and as “WifiSpots” in the Netherlands. It is enabled by WiFi modems, and starting in 2014 the Horizon TV box, of our internet customers and access is free for our internet customers. By using the WiFi modems and the Horizon TV box, the Community WiFi does not affect the internet speeds of our customers. The Community WiFi is created through the sharing of access to our customers’ home wireless routers.
In the Netherlands, Romania and Switzerland, a subscriber must subscribe to our video service in order to subscribe to our internet service. In our other markets, our broadband internet service is available on a stand-alone basis or in combination with one or more of our other services. Subscribers to our internet service pay a monthly fee based on the tier of service selected. In addition to the monthly fee, customers pay an activation service fee upon subscribing to an internet service. This one time fee may be waived for promotional reasons. We determine pricing for each different tier of internet service through an analysis of speed, data limits, market conditions and other factors.
Telephony. Multi-feature fixed-line telephony services are available through our managed, quality of service based voice-over-internet-protocol (VoIP) technology in all of our broadband communication markets. In the U.K., Chile, Austria and Hungary, we also provide traditional circuit-switched fixed-line telephony services. We pay interconnection fees to telephony providers when calls by our subscribers terminate on another network and receive similar fees from providers when calls by their users terminate on our network through interconnection points. We are also offering mobile services, both data and voice, as a mobile virtual network operator (MVNO) over third-party networks in the U.K., Germany, Belgium, Chile and Poland. In the Netherlands and in Hungary we provide mobile data services through MVNO arrangements. We plan to add MVNO arrangements in certain of our other broadband communication markets, as a complement to our fixed-line telephony services.
Our fixed-line telephony service may be selected on a stand-alone basis or in combination with one or more of our other services. Our fixed-line telephony service includes a basic fixed-line telephony product for line rental and various calling plans, which may consist of any of the following: unlimited network, national or international calling, unlimited off-peak calling and minute packages, including calls to fixed and mobile phones. We also offer a second or third phone line at an incremental cost. In Poland we offer a phone app that allows our fixed-line telephony customers with smartphones

I-12



to use their fixed-line call packages. We also launched this phone app in the U.K., Belgium and Romania in 2013 and plan to launch it in additional markets in 2014.
Telenet and VTR Wireless provide their mobile telephony services as full MVNOs through partnerships with a third-party mobile network operator in their respective footprints. Telenet and VTR Wireless own the core network, including switching, backbone, interconnections, etc., and lease the third party’s radio access network. This arrangement permits Telenet and VTR Wireless to offer their respective customers all mobile services using its core network without having to build and operate a cellular radio tower network and without being limited to offering customers packages and rates designated by the wireless network provider. We also offer mobile services using third-party networks in the U.K., Germany, Poland and certain other markets. In the U.K., Germany and Poland, we provide mobile telephony as light MVNOs. In these countries, we lease the core network as well as the radio access network from a mobile network operator. These arrangements permit our customers in these countries to have access to the third party mobile communications services while we maintain the customer relationship. We offer our mobile services throughout the U.K., Belgium (and parts of Luxembourg), Chile and Poland. In Germany, we offer our mobile service to our customers located within our German footprint who subscribe to a double-play or triple-play bundle and to a lesser extent on a stand-alone basis.
Where mobile services are available within our operations, subscribers pay varying monthly fees depending on whether the mobile service is included with our fixed-line telephony service or includes mobile data services via mobile phones, tablets or laptops. Our mobile services typically include telephony, short message service (or SMS) and internet. Calls, both within and out of network, incur a charge or are covered under a postpaid monthly service plan. Our stand-alone mobile services are primarily on a post-paid basis with customers subscribing to services for periods ranging from 30 days for a SIM-only contract to up to 24 months, with the latter often taken with a subsidized mobile handset. In the U.K., we also offer a prepaid service, where the customers pay for the service prior to using it and generally have no minimum contract term.
Business Services
In addition to our residential services, we offer voice, broadband internet, data, video, wireless and cloud services to business customers. Our business services are designed to meet the specific demands of the business customer. Our business customers range from SOHO (generally fewer than 10 employees) to medium and large enterprises, as well as on a wholesale basis to other operators. In addition, we target specific industry segments, such as financial institutions, hospitals and care facilities, education institutions and government offices, with tailored solutions combining our standard range of services with value added features, such as dedicated customer care and enhanced service performance monitoring. We also offer a complete range of access, voice and internet services to carriers, internet service providers (ISPs) and mobile operators.
Our business services are designed to meet the specific demands of our business customers with a wide range of services. These include, among other things, (1) VoIP and circuit-switch telephony, gateways, hosted solutions and conferencing options for our voice services, (2) internet access with upload speeds from 2 Mbps to 10 Gbps and virtual private networks through our broadband services, (3) video programming packages and for targeted industries dedicated headends, (4) voice and data SIM cards, handsets and WiFi networks on our mobile networks, and (5) webhosting, managed security systems, storage solutions and cloud enabled software packages through our cloud services.
Our business services are provided to business subscribers at contractually established fees based on the type of services received. Customers receive services on terms and conditions similar to those offered to our residential subscribers. For business customers, we enter into individual agreements that address their needs. These agreements are generally for a period of one or more years. In addition to providing business services over our networks, we also have operations and agreements in place to provide our services to our business customers over dedicated fiber lines and third party fiber networks.
Technology
In almost all of our markets, our video, broadband internet and fixed-line telephony services are transmitted over a hybrid fiber coaxial cable network. This network is composed primarily of glass fiber with only the last part that connects the home to the network composed of coaxial cable. Over 96% of our network allows for two-way communications and is flexible enough to support our current services, as well as new services. In addition, the capacity available on our network increases as our analog subscribers switch to a digital service. This is because multiple digital channels can be compressed into the same space as one analog channel in the broadcast spectrum. The available space can then be used for other purposes, such as VoD services and high broadband speeds.
We continue to explore new technologies that will enhance our customer’s television experience, such as:

I-13



recapturing bandwidth and optimizing our networks by increasing the number of nodes in our markets, using digital compression technologies and through cluster splits;
expanding our network to accommodate business services;
using wireless technologies to extend our services outside the home;
offering remote access to our video services through computers, tablets and smartphones; and
developing and introducing next-generation platforms through multimedia home gateways or online media sharing and streaming (or cloud TV).
Our multimedia home gateway, Horizon TV, is a central media platform that is capable of distributing video, voice and data content throughout the home and to multiple devices. We are expanding the Horizon TV experience through cloud TV, including cloud DVR, VoD navigation and advanced applications. The cloud TV platform allows users to stream experiences to set-top boxes and CI+ modules. Horizon TV is available in our footprint in the Netherlands, Switzerland and Ireland and in portions of our footprint in Germany. The Horizon TV platform sets up a wireless network that connects the digital video content available on the television to devices, such as computers, tablets and smartphones. It also integrates access to personal media content, such as photos, music and movies stored in the home or in the cloud, enabling access on devices both in and outside the home. Digital video platforms are available through TiVo in the U.K. and Yelo TV in Belgium.
Horizon TV is powered by a user interface that provides customers a seamless intuitive way to access linear, time-shifted, on-demand and web-based content on the television. It features an advanced set-top box that delivers not only video, but also internet and voice connections along with a wireless network for the home. The box for Horizon TV has six in-built tuners, two of which are dedicated to channel-surfing. This allows the customer to view programming information while their current program is playing. Also, up to four programs can be recorded simultaneously and up to four devices can connect to the Horizon TV box and view different content. In certain markets, we offer a box for Horizon TV without the recording functionality. For our multimedia gateway customers, we also offer apps for various services. We intend to (1) expand the availability of Horizon TV to other markets within our footprint and (2) continue to improve the Horizon TV user experience with new functionality and software updates.
We deliver our high speed data and fixed-line telephony though our cable network. The cable networks of our operations are connected to our “aorta” backbone, a tier 1 carrier, that permits us to serve our customers through settlement free collaboration with other carriers without the cost of using a third-party network.
Supply Sources
For our video services, we license almost all of our programming and on-demand offerings from broadcast and cable programming networks, as well as DTH content providers. For such licenses, we generally pay a monthly fee on a per channel or per subscriber basis. We generally enter into long-term programming licenses with volume discounts and marketing support. For on-demand programming and streaming services, we generally enter into shorter-term agreements. For our distribution agreements, we seek to include the rights to offer the licensed programming to our customers through multiple delivery platforms and though our apps for smartphones and tablets.
We purchase each type of customer premise equipment from a number of different suppliers with at least two or more suppliers for our high-volume products. Customer premise equipment includes set-top boxes, modems, CI+ modules, DVRs, tuners and similar devices. For each type of equipment, we retain specialists to provide customer support. For our broadband services, we use a variety of suppliers for our network equipment and the various services we offer. Similarly, we use a variety of suppliers for mobile handsets to offer customers in our operations with mobile services.
We license software products, including email and security software, and content, such as news feeds, from several suppliers for our internet services. The agreements for these products require us to pay a per subscriber fee for software licenses and a share of advertising revenue for content licenses. For our TiVo service in the U.K., we have a partnership arrangement where TiVo is the exclusive provider of the user interface software for our next generation set-top boxes, which provide converged television and broadband internet capabilities, and we are the exclusive distributor of the TiVo services and technology in the U.K. For our fixed-line telephony services, we license software products, such as voicemail, text messaging and caller ID, from a variety of suppliers. For these licenses we attempt to enter into long-term contracts, which generally require us to pay based on usage of the services.

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The following table presents certain penetration and network data as of December 31, 2013, with respect to the cable systems of our consolidated subsidiaries in Europe, Chile and Puerto Rico. The table reflects 100% of the data applicable to each of our subsidiaries regardless of our ownership percentage. Percentages are rounded to the nearest whole number.
Network & Product Penetration Data (%)
at December 31, 2013
 
UK
 
Germany
 
Belgium
 
The Netherlands
 
Switzerland
 
Austria
 
Ireland
 
Poland
 
Hungary
 
Czech Republic
 
Romania
 
Slovakia
 
Chile
 
Puerto Rico
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liberty Global Network Data:
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Two-way homes passed (HP) percentage (1)
100
 
97
 
100
 
100
 
87
 
100
 
87
 
96
 
99
 
93
 
92
 
95
 
82
 
100
Digital video availability percentage (2)
   99(9)
 
   100(9)
 
100
 
99
 
   88(9)
 
96
 
97
 
97
 
98
 
94
 
92
 
92
 
82
 
100
Broadband internet availability percentage (2)
   99(9)
 
   97(9)
 
100
 
100
 
   87(9)
 
100
 
87
 
96
 
99
 
94
 
92
 
89
 
82
 
100
Fixed-line telephony availability percentage (2)
   99(9)
 
   97(9)
 
100
 
100
 
   87(9)
 
100
 
86
 
96
 
99
 
94
 
92
 
89
 
82
 
100
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bandwidth percentage (3):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
at least 860 MHz
14
 
97
 
26
 
100
 
100
 
86
 
55
 
99
 
16
 
93
 
91
 
97
 
51
 
46
750 MHz to 859 MHz
76
 
 
 
 
 
 
33
 
   —(10)
 
55
 
 
    —(10)
 
 
35
 
less than 750 MHz
10
 
3
 
74
 
 
    —(10)
 
14
 
12
 
   —(10)
 
29
 
7
 
9
 
3
 
14
 
54
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liberty Global Product Penetration:
 
 

 
 
 

 

 

 

 
 
 
 
 
 
 

 

 
 
 
 
Cable television penetration (4)
30
 
52
 
72
 
57
 
66
 
40
 
45
 
45
 
41
 
34
 
37
 
38
 
34
 
30
Digital cable penetration (5)
100
 
34
 
71
 
68
 
46
 
65
 
87
 
69
 
59
 
82
 
57
 
69
 
86
 
100
HD, DVR & HD DVR penetration (6)
80
 
39
 
98
 
93
 
90
 
70
 
83
 
95
 
43
 
33
 
13
 
23
 
44
 
34
Broadband internet penetration (7)
35
 
21
 
51
 
38
 
35
 
33
 
45
 
35
 
34
 
35
 
18
 
23
 
37
 
27
Fixed telephony penetration (7)
33
 
20
 
37
 
35
 
24
 
26
 
39
 
20
 
29
 
14
 
13
 
13
 
29
 
19
 
 
 

 
 
 

 

 

 

 
 
 
 
 
 
 

 

 
 
 
 
Double-play penetration (8)
18
 
8
 
30
 
9
 
17
 
13
 
25
 
22
 
16
 
35
 
15
 
8
 
21
 
24
Triple-play penetration (8)
66
 
29
 
46
 
58
 
29
 
45
 
37
 
32
 
31
 
15
 
20
 
21
 
46
 
36





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_____________________
(1)
Percentage of total HP that are two-way HP.
(2)
Percentage of total HP to which digital video (including digital MMDS), broadband internet or fixed telephony services, as applicable, are made available.
(3)
Percentage of total HP served by a network with the indicated bandwidth. HP for Ireland excludes MMDS HP.
(4)
Percentage of total HP that subscribe to cable television services (Analog Cable or Digital Cable).
(5)
Percentage of cable television subscribers (Analog Cable and Digital Cable Subscribers) that are Digital Cable Subscribers.
(6)
Percentage of Digital Cable Subscribers with HD, DVR or HD DVR. This Percentage would not include subscribers who may use a purchased set-top box or other means to receive our basic digital cable channels without subscribing to any services that would require the payment of recurring monthly fees in addition to the basic analog service fee due to the fact that our basic digital cable channels are not encrypted in certain portions of our footprint.
(7)
Percentage of two-way HP that subscribe to broadband internet or fixed-telephony services, as applicable.
(8)
Percentage of total customers that subscribe to two services (double-play customers) or three services (triple-play customers) offered by our operations (video, broadband internet and fixed-line telephony).
(9)
Assuming the contractual right to serve the building exists in the case of multiple dwelling units.
(10)
Less than 1%.



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The following table provides information on the products and services available to our cable customers as of December 31, 2013. Percentages are rounded to the nearest whole number.

Video, Broadband Internet & Fixed-Line Telephony and Mobile Services
at December 31, 2013
 
 
UK
 
Germany
 
Belgium
 
The Netherlands
 
Switzerland
 
Austria
 
Ireland
 
Poland
 
Hungary
 
Czech Republic
 
Romania
 
Slovakia
 
Chile
 
Puerto Rico
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Video services (excluding DTH):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
VoD
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
 
 
 
 
 
 
X
 
X
DVR
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
HD
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
Electronic programming guide
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
Number of channels in basic digital tier
 
68
 
80 or 112(3)
 
75
 
89
 
60
 
86
 
67
 
156
 
82
 
100
 
132
 
94
 
86
 
101
Number of channels in basic analog tier (1)
 
 
  34 or 41(3)
 
21
 
31
 
26
 
38
 
18
 
35
 
32
 
41
 
59
 
47
 
67
 
Number of unique channels in basic digital tier (2)
 
68
 
46 or 71(3)
 
54
 
58
 
34
 
48
 
49
 
111
 
52
 
75
 
73
 
47
 
19
 
101
    Number of HD channels
 
43
 
60
 
15
 
50
 
65
 
34
 
38
 
44
 
21
 
29
 
19
 
26
 
26
 
96
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Broadband internet service:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum download speed offered (Mbps)
 
120
 
150
 
120
 
200
 
150(6)
 
250
 
200
 
250
 
240
 
240
 
200
 
150
 
120
 
60
Percentage of Two-way Homes Passed with 3.0 speeds of at least 100 Mbps
 
100
 
100
 
100
 
99
 
100
 
100
 
96
 
100
 
93
 
98
 
100
 
100
 
100
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed-line telephony and mobile services:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
VoIP Fixed-line
 
(4) 
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
Mobile (MVNO)
 
X
 
X
 
X
 
(5) 
 
 
 
 
 
 
 
X
 
(5) 
 
 
 
 
 
 
 
X
 
 

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___________________
(1)
Excludes the lifeline tier.
(2)
Excludes the channels that are also included in basic analog tier.
(3)
Depending on whether the subscriber is located in Baden-Württemberg, North Rhine-Westphalia or Hesse.

(4)
Available to business customers only.

(5)
Available for data only.

(6)
Offers 500 Mbps in a limited area.

Operations
Provided below is country-specific information with respect to the broadband communications and DTH services of our subsidiaries.
U.K. (Virgin Media). The operations of the European Operations Division in the U.K. are undertaken by Virgin Media. Virgin Media offers triple-play services consisting of video, internet and fixed-line telephony in parts of many metropolitan areas in England, Wales, Scotland and Northern Ireland. Virgin Media also offers quadruple-play services that include mobile voice and data services as a MVNO through an arrangement with a mobile communications provider.
Virgin Media’s video services includes a broad range of digital interactive services, including VoD, and a range of premium subscription-based and pay-per-view services. As a complement to its broadband services, Virgin Media offers a comprehensive internet streaming video service, Virgin TV Anywhere, that allows its video customers to stream up to 90 real-time video channels, including Sky Sports, and watch VoD content anywhere in the U.K. where they have a broadband connection. In addition, Virgin Media offers the multimedia home gateway TiVo to its digital video customers. TiVo customers can also access real-time television channels and manage their TiVo box with a smartphone, tablet or laptop. When in the home, these devices also act as a remote control for TiVo. The streaming service is available at no extra cost to Virgin Media’s digital video customers. At December 31, 2013, Virgin Media had 2.0 million connected TiVo customers. Virgin Media does not offer an analog video service.
Virgin Media offers its subscribers premium digital channels from British Sky Broadcasting Group plc (BSkyB) through an agreement with BSkyB and premium BT Sport channels through an agreement with BT Group plc (BT). Virgin Media subscribers may receive these channels through a smart card on Virgin Media’s network as part of Virgin Media’s extended tier services or for an incremental subscription fee. In addition, Virgin Media subscribers using TiVo may access internet programming services pursuant to agreements between Virgin Media and such service providers.
Through its twisted copper network, Virgin Media offers fixed-line telephony services to its residential customers. It offers its mobile service on both a pre-paid and post-paid basis. Virgin Media’s telephony services via VoIP are only available to its business customers. In addition, Virgin Media offers mobile services and has an extensive network of public WiFi hotspots in the London underground train (or Tube) stations available to its customers.
Germany (Unitymedia KabelBW). The operations of the European Operations Division in Germany are operated by Unitymedia KabelBW. Unitymedia KabelBW’s operations are located in the German federal states of Baden-Württemberg, North Rhine-Westphalia and Hesse and include the major cities of Cologne, Dortmund, Düsseldorf, Essen, Frankfurt, Karlsruhe, Mannheim, Stuttgart and Wiesbaden. Unitymedia KabelBW offers triple-play services consisting of video, internet and fixed-line telephony services in nearly all of its footprint. Unitymedia KabelBW also offers quadruple-play services that includes mobile voice and data services. Unitymedia KabelBW offers the mobile service as a MVNO through an arrangement with a mobile communications provider. Unitymedia KabelBW offers a CI+ module to its video cable customers for an incremental monthly charge. The CI+ module with a smart card allows the customer to access our encrypted digital video service without a set-top box. No set-top box, CI+ module or smart card is, however, required to receive basic digital services because our basic digital service is unencrypted in our Germany footprint. In September 2013, Unitymedia KabelBW launched the next generation set top box Horizon TV and at December 31, 2013, it had over 55,000 connected subscribers.
Through an agreement with Sky Deutschland AG (Sky Deutschland), Unitymedia KabelBW offers its subscribers premium video channels from Sky Deutschland and, in addition, in the Baden-Württemberg region, a bundle of its internet and

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fixed-line telephony services with premium channels from Sky Deutschland. Unitymedia KabelBW subscribers may receive Sky Deutschland channels for an incremental subscription fee through a smart card on the Unitymedia KabelBW network. VoD is available to subscribers to its digital video service on a pay-per-view basis and includes HD and 3D content. In addition, Unitymedia KabelBW offers a Horizon TV online service and app that allow digital video customers to view linear channels, remotely manage their DVR and access VoD with a tablet, smartphone or a laptop.
Nearly two-thirds of Unitymedia KabelBW’s video customers are in multiple dwelling units where Unitymedia KabelBW has the billing relationship with the landlord or housing association or with a third party (Professional Operator) that operates and administers the in-building network on behalf of housing associations. Many of these agreements allow Unitymedia KabelBW to offer its digital video, broadband internet and fixed-line telephony services directly to the end customer. Professional Operators may procure the basic video signals from Unitymedia KabelBW at volume-based discounts and generally resells them to housing associations with whom the operator maintains the customer relationship. Unitymedia KabelBW has entered into agreements with Professional Operators, such as Tele Columbus Multimedia GmbH, that allow Unitymedia KabelBW to market its digital video, broadband internet and fixed-line telephony services directly to the Professional Operator’s subscriber base.
Although the majority of Unitymedia KabelBW’s service agreements with housing associations have multi-year terms, in connection with our 2011 acquisition of the German cable network KBW (the KBW Acquisition), we agreed to grant early termination rights on certain agreements that Unitymedia KabelBW has with the largest housing associations and which have a remaining term of more than three years as of December 15, 2011. At December 31, 2013, approximately 14% of the dwelling units covered by these agreements remain subject to this early termination right. See Regulatory Matters—Europe—Germany below for additional information concerning the commitments we have made to regulators in connection with the KBW Acquisition and an on-going review by the German antitrust authorities of customary practices regarding such multi-year agreements.
Unitymedia KabelBW has entered into various long-term agreements with the incumbent telecommunications operator, Deutsche Telekom AG (Deutsche Telekom), for the lease of cable duct space and hubs, as well as use of fiber optic transmission systems, towers and facility space. In addition, Unitymedia KabelBW purchases a portion of the electricity required for the operation of its networks through Deutsche Telekom under such agreements. Unitymedia KabelBW’s ability to offer its broadband communications services to customers is dependent on the agreements with Deutsche Telekom. These agreements are long-term and may only be terminated under certain limited exceptions. Any termination, however, would have a material adverse effect on the operations of Unitymedia KabelBW. For information on a legal action that Unitymedia KabelBW commenced against Deutsche Telekom in December 2012 regarding these agreements, see note 16 to our consolidated financial statements included in Part II of this Annual Report.
Belgium (Telenet). The operations of the European Operations Division in Belgium are conducted by Telenet. At December 31, 2013, we owned 57.4% of Telenet’s outstanding ordinary shares. Telenet offers quadruple-play services consisting of video, broadband internet, fixed-line telephony and mobile voice and data services in Belgium, primarily to residential customers in the Flanders region and approximately one-third of the city of Brussels. In addition, pursuant to an agreement executed on June 28, 2008 (the PICs Agreement), with four associations of municipalities in Belgium (the pure intercommunales or PICs), Telenet leases the PICs broadband communications network and, accordingly, makes its services available to all of the homes passed by the cable network owned by the PICs.
Telenet’s premium video channels include general entertainment, documentary, foreign language, kids, music, sports, adult and movies. Telenet has the exclusive broadcasting rights for the Belgian football championship for three seasons, through May 2014. As a result, Telenet rebranded its existing pay television sports channels into “Sporting Telenet”. Together with the exclusive broadcasting rights for international football (soccer) championships, Telenet owns a rich and attractive portfolio of sports content ranging from football (soccer) and basketball to golf. In February 2013, Telenet launched its multimedia home gateway, Yelo TV, and at December 31, 2013, it had over 384,300 connected subscribers. In addition, Telenet offers Yelo TV apps that allow Telenet’s digital video customers to remotely manage their DVR, view programs remotely and access VoD with a tablet, smartphone or laptop. Commencing in February 2013, Telenet also offers a CI+ module for an incremental monthly charge to access its encrypted digital service.
Telenet has an extensive network of Community WiFi across its footprint, branded “Wi-free”. The Community WiFi provides free WiFi access to its customers who are traveling within it footprint. Telenet has nearly 1,000,000 Community WiFi spots as of December 31, 2013. It also has approximately 1,500 public hotspots covering train stations, bars, hotels and similar public places. In addition, Telenet offers, individually and as a bundle, fixed-line telephony services over its network and mobile telephony services as a full MVNO under the “Telenet Mobile” brand name.

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Telenet has the direct customer relationship with the analog and digital video subscribers on the PICs network. Pursuant to the PICs Agreement, Telenet has full rights to use substantially all of the PICs network under a long-term capital lease. Unless extended, the PICs Agreement will expire on September 23, 2046, and cannot be terminated earlier (except in the case of non-payment or bankruptcy of the lessee).
In July 2011, Telenet Tecteo Bidco, a partnership between Telenet and the Tecteo SCRL (the second largest cable provider in Belgium operating in the Walloon region), acquired mobile spectrum licenses in the 2.1 GHz spectrum band. Telenet Tecteo Bidco has determined that it is no longer able to use these spectrum licenses as the result of the conclusion of negotiations with the network operators in Belgium and the absence of regulatory alternatives.
The Netherlands. The operations of the European Operations Division in the Netherlands (UPC Netherlands) are located in six broad regional clusters, including the major cities of Amsterdam and Rotterdam. UPC Netherlands offers video, internet and fixed-line telephony throughout its footprint. For information regarding UPC Netherlands’ obligation to resell its television services pursuant to laws that became effective January 1, 2013, see Regulatory Matters—Europe—The Netherlands below.
UPC NetherlandsVoD service, including catch-up television, is available to subscribers to its digital tiers on a pay-per-view basis. A subscription-based VoD service is included in the extended digital tier for no additional charge. The subscription-based VoD service includes various programming (in addition to catch-up television) including music, kids, documentaries, adult, sports or series and a limited amount of 3D programming. Digital cable customers may also subscribe to premium channels, such as Film 1, Sport 1 NL and the premium football league channel, Fox Sports Eredivisie, alone or in combination, for additional monthly charges. In September 2012, UPC Netherlands launched Horizon TV and at December 31, 2013, it had over 200,000 connected subscribers. In addition to Horizon TV, UPC Netherlands offers apps that allow its subscribers to record a program remotely, view linear channels and access VoD through smartphones and tablets or an internet browser while in the home via the Horizon TV online service. UPC Netherlands also offers a CI+ module for an incremental monthly charge to access its encrypted digital service. A CI+ module in combination with a smart card allows the customer to view their encrypted digital video service on a television that has a CI+ slot, without the need for a set-top box. The CI+ module is not required to view UPC Netherlands basic digital service because such service is not encrypted.
In October 2013, UPC Netherlands launched a Community WiFi network across its footprint, branded “WifiSpots”. The Community WiFi provides our internet subscribers a seamless connectivity experience over WiFi. UPC Netherlands plans to expand its Community WiFi to 500,000 free spots in early 2014. In addition to its triple-play services, UPC Netherlands plans to expand its mobile data service to include voice in 2014, enabling it to market quadruple-play services.
Switzerland. The operations of the European Operations Division in Switzerland (UPC Cablecom) are located in 24 of the 26 member states (Cantons) of Switzerland, including major cities such as Bern, Zürich, Lausanne and Geneva. UPC Cablecom’s basic video service (digital or analog) is available in any one of three languages (French, German or Italian). At the beginning of 2013, UPC Cablecom launched Horizon TV and at December 31, 2013, it had over 135,000 connected subscribers. As a complement to its digital video service, UPC Cablecom also offers apps that allow its subscribers to remotely manage a DVR, view linear channels and access VoD with a smartphone, tablet or laptop anywhere a broadband or WiFi connection is available. In addition to its video, broadband internet and fixed-line telephony services, UPC Cablecom has entered into a partnership with a mobile communications provider, which will allow it to offer mobile voice and data service as a full MVNO and market quadruple-play packages. UPC Cablecom plans to offer such service in 2014. In addition, UPC Cablecom has launched a pilot Community WiFi in select markets in January 2014 and plans to activate the Community WiFi network throughout its footprint.
In each of its digital cable packages, UPC Cablecom includes the functionality for transaction-based VoD service (depending on location), including catch-up television and pay-per-view services, and HD channels. UPC Cablecom offers a CI+ module to its customers to access its encrypted digital service. No set-top box, CI+ module or smart card is, however, required to receive UPC Cablecom’s basic digital service because its basic digital service is not encrypted. A CI+ module or set-top box in combination with a smart card may be used to view any of UPC Cablecom’s other digital packages with the customer paying the incremental charge over the digital entry tier’s applicable rate.
For 65% of its video subscribers, UPC Cablecom maintains billing relationships with landlords or housing associations, and provides basic video service to the tenants. The landlord or housing association administers the billing for the basic video service with their tenants and manages service terminations for their rental units.
UPC Cablecom offers digital video, broadband internet and fixed-line telephony service directly to the analog cable subscribers of those partner networks that enter into service operating contracts with UPC Cablecom. UPC Cablecom

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has the direct customer billing relationship with these subscribers. By permitting UPC Cablecom to offer some or all of its digital video, broadband internet and fixed-line telephony products directly to those partner network subscribers, UPC Cablecom’s service operating contracts have expanded the addressable markets for UPC Cablecom’s digital products. In exchange for the right to provide digital products directly to the partner network subscribers, UPC Cablecom pays to the partner network a share of the revenue generated from those subscribers. UPC Cablecom also provides full or partial analog television signal delivery services, network maintenance services and engineering and construction services to its partner networks.
Other Western Europe. The European Operations Division also operates cable and DSL networks in Austria (UPC Austria) and cable and MMDS networks in Ireland (UPC Ireland). The DSL services are provided over an unbundled loop or, in certain cases, over a shared access network. UPC Austria’s DSL operations are available in the majority of Austria, wherever the incumbent telecommunications operator has implemented DSL technology.
Austria. UPC Austria’s cable operations are located in regional clusters encompassing the capital city of Vienna, the regional capitals of Graz, Innsbruck and Klagenfurt, two smaller cities and the Vorarlberg region. Three of these cities (Vienna, Wr. Neustadt and Baden), directly or indirectly, own 5% of the local operating subsidiary of UPC Austria serving the applicable city. UPC Austria’s video service (digital and analog) is available primarily in the German language. Its premium packages include ethnic channels (such as Serb, Bosnian and Turkish channels), music, adult and international channels. Customers with the necessary equipment and who subscribe to UPC Austria’s analog service are also able to access its basic digital service, which became unencrypted in February 2013. In addition, through an agreement with Sky Deutschland, UPC Austria offers its digital subscribers a number of premium channels, including HD channels, from Sky Deutschland. UPC Austria offers its broadband internet service over cable and over DSL.
Ireland. UPC Ireland’s operations are located in five regional clusters, including the capital city of Dublin and other cities, including Cork, Galway and Limerick. To complement its digital offering, UPC Ireland offers its digital subscribers several premium channels (sports, movies, adult, ethnic and kids) and a pay-per-view service and VoD service. UPC Ireland launched the next generation set-top box Horizon TV in August 2013 and at December 31, 2013, it had over 44,000 connected subscribers. UPC Ireland also introduced Horizon TV app and Horizon TV online service, offering customers access to linear channels, VoD programming and remote DVR management across multiple devise while in the home. In addition, UPC Ireland has launched a pilot Community WiFi network in select markets in January 2014 and plans to activate this network throughout its footprint.
Central and Eastern Europe. The European Operations Division also operates cable networks in Poland (UPC Poland), Hungary (UPC Hungary), the Czech Republic (UPC Czech), Romania (UPC Romania) and Slovakia (UPC Slovakia). VoD service, including catch-up television, is available to our subscribers in Hungary and in major metropolitan areas in Poland. UPC Hungary, UPC Poland and UPC Romania have each launched apps for no charge to subscribers that permit them to view the digital channel programming guide, schedule DVR recordings from any location, and use their smartphones as a television remote control. The European Operations Division also has DTH operations in most of these countries, which it provides through UPC DTH.
PolandUPC Poland’s operations are located in regional clusters encompassing nine of the 10 largest cities in Poland, including the capital city Warsaw, Cracow and Katowice. Customers with the necessary equipment and who have a monthly subscription to UPC Poland’s analog service are also able to access its basic digital service, which became unencrypted in August 2013. UPC Poland also offers a catch-up television service. In addition, UPC Poland intends to launch Community WiFi in 2014.
Hungary. UPC Hungary’s operations are located in 23 major Hungarian towns and cities, including the capital city of Budapest and the cities of Debrecen, Miskolc, Pécs and Székesfehérvár. For its digital video subscribers, UPC Hungary offers a CI+ module, which in combination with a smart card, allows the subscriber to view the digital service without the need for a set-top box. In each of its digital cable packages, UPC Hungary includes the functionality for transaction-based VoD services, which include various programming such as recent movies, music and HD programming, as well as linear channels. UPC Hungary offers its fixed-line telephony services through circuit-switched fixed-line telephony to subscribers on its twisted copper pair network and through VoIP over its two-way capable cable network.
The Czech RepublicUPC Czech’s operations are located in cities and towns throughout the Czech Republic, including Prague, Brno, Ostrava and Plzen. A majority of the subscribers to UPC Czech’s digital video service receive such service through an HD or HD DVR box. Subscribers may also receive the digital video service through a CI+ module in combination with a smart card without the need for a set-top box. UPC Czech offers a lifeline tier and basic tier of digital programming, as well as extended tiers and premium packages. Approximately 48% of UPC Czech’s digital cable

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subscribers receive the basic and extended tier services. UPC Czech’s analog service is offered only in areas where its digital service is not available.
RomaniaUPC Romania’s operations are located primarily in three regional clusters, which include nine of the 12 largest cities (each with more than 150,000 inhabitants) in Romania, including the capital city of Bucharest and the cities of Cluj-Napoca, Timisoara, Iasi and Constanta. UPC Romania’s video service includes Romanian terrestrial broadcast channels, selected European satellite programming and other programming. In addition to its standard broadband internet service offerings, UPC Romania also offers a 256 Kbps service at no incremental charge as an inducement for customers to subscribe to certain services.
SlovakiaUPC Slovakia’s operations are located in seven regions in Slovakia, including the five largest cities of Bratislava, Kosice, Presov, Banská Bystrica and Zilina. Besides its video cable services, UPC Slovakia offers video services in certain areas over its MMDS network. UPC Slovakia offers all Slovakian terrestrial, cable and local channels, selected European satellite and other programming, and audio channels. Subscribers to UPC Slovakia’s digital video services may receive such service through a CI+ module in combination with a smart card without the need for a set-top box. UPC Slovakia’s analog service, which is not available to its MMDS subscribers, includes a lifeline tier of service. Of UPC Slovakia’s analog cable subscribers, approximately 55% subscribe to the lifeline analog service.
UPC DTH. UPC DTH, based in Luxembourg, provides DTH services in the countries of the Czech Republic, Hungary and Slovakia and manages the Romania DTH provider FocusSat. UPC DTH and FocusSat together provide DTH services to over 778,000 customers. UPC DTH offers a lifeline tier and either directly or through FocusSat a basic tier, an extended tier and premium channel options, as well as 35 free-to-air (FTA) television and audio channels. A subscriber to its basic tier may receive 50 to 70 digital video channels depending on their location. Its premium channel offerings cover a range of interests (such as movies, adventure, sports, adult and comedy). In 2013, UPC DTH launched a CI+ module offer in the Czech Republic and Slovakia. The CI+ module will enable its subscribers in the Czech Republic and Slovakia to receive its signals without a set-top box. DVRs are also available and a subscriber to the extended tier will receive nine to 14 HD channels depending on their location. Subscribers to the DTH services may pay either an annual fee and receive an activation card for the lifeline tier of video service or pay a monthly fee for a basic or extended tier of service. UPC DTH provides DTH services to 19% of our total video subscribers in the Czech Republic, 29% of our total video subscribers in Hungary, 26% of our total video subscribers in Slovakia and, through FocusSat, 29% of our total video subscribers in Romania. 
UPC DTH and FocusSat have agreements with Telenor Satellite Broadcasting for the lease of transponder space, including expansion capacity, on the Thor satellites. These agreements will expire on December 31, 2017, unless extended as provided in such agreements. All of UPC DTH’s services are on the Thor satellite system. UPC DTH offers both standard definition (SD) and HD services to all its customers in Hungary, the Czech Republic, Slovakia and, through FocusSat, in Romania.
Chile. Our broadband distribution business in Chile is conducted primarily through our 80%-owned subsidiary VTR GlobalCom. Our mobile service in Chile is conducted primarily though VTR Wireless, also an 80%-owned subsidiary.
VTR GlobalCom offers triple-play services consisting of video, broadband internet and fixed-line telephony services in 64 cities, including Santiago, Chile’s largest city, the large regional cities of Iquique, Antofagasta, Concepción, Viña del Mar, Valparaiso and Rancagua, and smaller cities across Chile. VTR GlobalCom obtains programming from the United States, Europe, Argentina and Mexico. There is also domestic cable programming in Chile, based on local events such as football (soccer) matches and regional content. Digital cable customers may subscribe to one or more premium video channels, including HD channels for an additional monthly charge. The premium channels include movies, sports, kids, international and adult channels. VTR GlobalCom’s analog service is offered only in areas where its digital service is not available. VTR GlobalCom also owns and operates Bazuca.com, a non-subscription service that provides on-line streaming content on a pay-per-view basis.
VTR GlobalCom offers its broadband internet services in 34 communities within Santiago and 42 communities outside Santiago. VTR GlobalCom also offers multi-feature telephony service over its cable network to customers in 34 communities within Santiago and 42 communities outside Santiago via either circuit-switched telephony or VoIP, depending on location. Since September 2013, VTR Wireless offers mobile voice and data services as a full MVNO pursuant to an arrangement with a third-party mobile telecommunications provider. At that time, VTR Wireless completed the process of migrating its commercial mobile traffic to a third party network operator. For more information regarding the transition by VTR Wireless to full MVNO, see “—Residential Services—Telephony” above.
Puerto Rico. Our broadband telecommunications service in Puerto Rico is conducted through our indirect 60%-owned subsidiary Liberty Puerto Rico. Liberty Puerto Rico offers only digital broadband services and provides these services

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in the San Juan metropolitan area and numerous other municipalities covering two-thirds of the island. Liberty Puerto Rico’s video service includes a basic tier of digital programming, an extended tier and premium packages, as well as a VoD service. The Liberty Puerto Rico network includes a 360 mile fiber ring around its network providing enhanced interconnectivity points to the island’s other local and international telecommunications companies.
Discontinued Operations--Programming Services
On October 28, 2013, we entered into an agreement to sell substantially all of Chellomedia’s assets to AMC Networks Inc. for €750.0 million ($1,034.2 million) in cash (the Chellomedia Transaction). The assets to be disposed of pursuant to the Chellomedia Transaction exclude Chellomedia’s premium sports and film channels in the Netherlands. It also does not include our Liberty Global Ventures division, which is an investor in various ventures for the development of country-specific Pan European programming and in various entities developing technology relevant to our operations. The Chellomedia Transaction, which was not conditioned on any regulatory approvals, closed on January 31, 2014.
In 2013, through Chellomedia’s programming networks, we provided programming channels to multi-channel distribution systems owned by us and by third parties. We also represented programming networks owned by third parties. Chellomedia programming networks distributed their services through a number of distribution technologies, principally cable television, internet protocol television (IPTV) and DTH. The programming services were delivered to subscribers as part of a video distributor’s basic package of programming services for a monthly fee, or delivered as a programming service for an additional monthly charge, or on a VoD or pay-per-view basis. In addition, through Chellomedia, we owned and managed a Digital Media Center (DMC) in Amsterdam. The DMC is a technologically advanced production facility that provides clients, including our European Operations Division, with channel origination, post-production and satellite and fiber transmission.
Competition
The markets for video, broadband internet, fixed-line telephony and mobile services are highly competitive and rapidly evolving. In addition, technological advances and product innovations have increased and are likely to continue to increase the number of alternative providers available to our customers. Consequently, our businesses have faced and are expected to continue to face significant competition in these markets in the countries in which they operate and specifically, as a result of deregulation, in the European Union (EU). The percentage information in this section reflects the data for each country regardless of the extent of our footprint in such country and is as of the date of the relevant sources listed in the following sentences. The percentage information provided below for the various countries in Europe is based on information from the subscription based website DataXis for the third quarter of 2013. For Latin America, the percentage information is based on information from DataXis for the third quarter of 2013 and information on Chilean telephony provided by the Chilean Subsecretary of Telecommunications (SubTel) as of June 30, 2013. The competition in certain countries in which we operate is described more specifically after the respective competition overview on video, broadband internet, fixed-line telephony and mobile services.
Video Distribution
Our businesses compete directly with a wide range of providers of communication and entertainment services to consumers. Depending upon the country and market, these may include: (1) traditional FTA broadcast television services; (2) DTH satellite service providers; (3) digital terrestrial television (DTT) broadcasters, which transmit digital signals over the air providing a greater number of channels and better quality than traditional analog broadcasting; (4) other cable operators in the same communities that we serve; (5) other fixed-line telecommunications carriers and broadband providers, including the incumbent telephony operators, offering (a) DTH satellite services, (b) IPTV over broadband internet connections using asymmetric digital subscriber line (ADSL) or very high-speed DSL technology (VDSL) or an enhancement to VDSL called “vectoring”, (c) IPTV over fiber optic lines where the fiber is to the home, cabinet, or building or to the node networks (fiber-to-the-home/-cabinet/-building/-node is referred to herein as “FTTx”), or (d) long-term evolution wireless service, next generation of ultra high-speed mobile data (LTE) services; (6) over-the-top video content aggregators utilizing our or our competitors’ high-speed internet connections; (7) satellite master antenna television systems, commonly known as “SMATVs,” which generally serve condominiums, apartment and office complexes and residential developments; (8) MMDS operators; and (9) movie theaters, video stores, video websites and home video products. Our businesses also compete to varying degrees with other sources of information and entertainment, such as online entertainment, newspapers, magazines, books, live entertainment/concerts and sporting events.

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We believe that our deep-fiber access provides us with several competitive advantages in the areas served by our network. For instance, our cable network allows us to concurrently deliver internet access, together with real-time television and VoD content at higher speeds and with less data loss than comparable services of other providers. In addition, our cable infrastructure allows us to provide “triple-play” bundled services of broadband internet, television and fixed-line telephony services without relying on a third-party service provider or network. Our capacity is dimensioned to support peak consumer demand. In serving the business market, many aspects of the network can be leveraged at very low incremental cost given that business demand peaks at a time when consumer demand is low, and peaks at lower levels than consumer demand.
Europe
In the European countries in which we operate, over 92% of the households own at least one television set. Our principal competition in the provision of video services in our European markets has historically been from traditional FTA broadcasters; DTH satellite providers in many markets, such as the U.K., Germany, Austria, Ireland, the Czech Republic and Slovakia, where we compete with long-established satellite platforms; incumbent telecommunications providers using fiber technology; and cable operators in various markets where portions of our systems have been overbuilt. Mobile broadband has gained a noticeable share of subscribers, and competition from SMATV or MMDS could also be a factor. In addition, as accessibility to video content on the internet increases, over-the-top viewing is a competitive factor.
Over the last several years, competition has increased significantly from both new entrants and established competitors using advanced technologies, aggressively priced services and exclusive channel offerings. Our competitors are also improving their video platforms with next generation set-top boxes. DTT is a significant part of the competitive market in Europe as a result of a number of different business models that range from full blown encrypted pay television to FTA television. Similarly, VDSL, which is either provided directly by the owner of the network or by a third party, is a significant part of the competitive environment in many of our markets as are FTTx networks. In all of our European markets, competitive video services are offered by the incumbent telecommunications operator, whose video strategies include VDSL, DTH, DTT and IPTV over FTTx networks. The ability of incumbent operators to offer the triple-play of video, broadband internet and fixed-line telephony services and, in some countries, a quadruple-play with mobile services, is exerting growing competitive pressure on our operations, including the pricing and bundling of our video products. The providers of DTH satellite services, particularly in the Central and Eastern European markets, are also significant competitors. In addition, over-the-top video aggregators are becoming more active in all our markets with their VoD service for television series and movies, catch-up television and linear channels from broadcasters. In some cases, these over-the-top services are provided free-of-charge, or the content library of such services are offered on an unlimited basis for a monthly fee.
Our ability to continue to attract and retain customers will depend on our continued ability to acquire appealing program content and third party programming services on acceptable financial or other terms. Some competitors, such as Swisscom AG (Swisscom) in Switzerland, have obtained long-term exclusive contracts for certain popular programs, which limits the opportunities for other providers, including our operations, to offer such programs. Other competitors also have obtained long-term exclusive contracts for programs, but our operations have access to certain of such programming through select contracts with these companies, including Sky Deutschland in Germany and BSkyB in the U.K. and in Ireland. If exclusive content offerings increase through other providers, programming options could be a deciding factor for subscribers on selecting a video service.
Portions of our systems have been overbuilt by FTTx networks, primarily in the Czech Republic, Romania and Slovakia and to a lesser extent, in Hungary, the Netherlands and Switzerland. Based on research of various telecommunication publications, including by the Organization for Economic Cooperation and Development, and internal estimates, approximately 62%, 64%, and 73% of our cable networks in the Czech Republic, Romania and Slovakia, respectively, have been overbuilt by FTTx networks. Also, 12% of our footprint in Hungary, 31% of our footprint in the Netherlands and 34% of our footprint in Switzerland are overbuilt by FTTx networks. Although, we have extensive FTTx overbuild in Switzerland, connectivity to the network is not available at all locations. In addition, government and quasi-government entities in certain of the countries in which we operate in Europe continue to invest in FTTx networks, creating another source of competition. In order to achieve download speeds of up to 100 Mbps or greater for customers, incumbent telecommunications operators are increasingly adopting VDSL with vectoring and bonding technologies as a more cost efficient solution compared to FTTx initiatives.
Our Central and Eastern European markets are also experiencing significant competition from other cable operators. These cable operators have significantly overbuilt our operations in Poland, Hungary, Romania and Slovakia. Based on research of various telecommunication publications, including the Organization for Economic Cooperation and Development, and internal estimates, approximately 42%, 52%, 31% and 47% of our operations in Poland, Hungary, Romania and Slovakia, respectively, are overbuilt by other cable providers.
In most of our Central and Eastern European markets, we also face intense competition from DTH services. Digi TV, the DTH platform of RCS & RDS S.A. (Digi TV), a Romanian cable, telephony and internet service provider that is targeting our

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analog cable, MMDS and DTH customers with aggressively priced DTH packages, in addition to overbuilding portions of our cable network in Hungary and Romania. In the Czech Republic and Slovakia, SkyLink and CSLink, the brand names of M7 Group SA, a European provider of DTH services, are also DTH competitors, providing aggressively priced packages of video content. The incumbent telecommunications operator in Romania also operates a competing DTH platform. UPC DTH offers advanced services and functionality, including DVR and premium content, to most of our Central and Eastern European markets. UPC DTH’s share of the subscription-based television market is 8% for Hungary, 4% for the Czech Republic, 3% for Slovakia, and through FocusSat, 5% for Romania.
In order to gain video market share, the incumbent operators and alternative service providers in a number of our larger markets have been pricing their DTT, VDSL or DTH video packages at a discount to the retail price of the comparable digital cable service and, in some cases, including DVRs as a standard feature.
To meet the challenges in this competitive environment, we compete on value by offering advanced services, such as DVR functionality, HD, catch-up television and multi-media gateways. In each of our countries we also tailor our packages to include attractive channel offerings and offer recurring discounts for bundled services and loyalty contracts. Discounts for bundled services are available in all our Europe operations. In addition, we seek to compete by accelerating the migration of our customers from analog to digital services, using advanced digital features such as HD, DVRs, VoD, catch-up television and offering attractive content packages and bundles of services at reasonable prices. HD and DVRs are an integral part of our digital services in all of our markets and VoD and catch-up television are an integral part of our digital services in most of our markets. In addition, from time to time, digital channel offerings are modified by our operations to improve the quality of our programming. Also, in Europe, the triple-play bundle is used as a means of driving video, as well as other products where convenience and price can be leveraged across the portfolio of services. Recently, we have expanded our services in certain markets to include mobile voice and data. We also continue to explore new technologies that will enhance our customer’s television experience. In this regard, to further enhance our digital video services, the next generation of Horizon TV has been launched in Germany, the Netherlands, Switzerland and Ireland, as well as YeloTV in Belgium.
U. K. (Virgin Media). We are the largest cable television provider in the U.K. in terms of the number of video cable customers and the sole provider of video cable services in substantially all of our network area. Virgin Media’s video cable services are available to approximately 46% of the U.K. television households and it serves 14% of the total U.K. television market. Virgin Media’s digital television services compete primarily with those of BSkyB, which is the primary pay satellite television platform in the U.K. BSkyB has approximately 9.8 million subscribers in the U.K. or 36% of the total television market. BSkyB owns the U.K. rights to various sports and movie programming content. BSkyB is both a principal competitor in the pay-television market and an important supplier of content to us. Virgin Media distributes several basic and premium video channels supplied by BSkyB. This is also the case with BT, which offers VDSL services and is a principal competitor. In August 2013, BT launched its own premium BT Sport channels, providing a range of sports content including football (soccer) from the English Premier League and, commencing in the 2015/2016 football (soccer) season, exclusive rights to the UEFA Champions League and the UEFA Europa League. The BT Sport channels are available over BT’s  IPTV platform, BSkyB’s satellite system and our cable network. BT is currently offering customers who subscribe to their broadband service free access to the SD version of the BT Sport channels. In addition, FTA DTT and internet-connected television services are a competitive factor.
To effectively compete, Virgin Media promotes its ability to offer attractive triple-play bundles over its cable network and its multimedia platform TiVo. TiVo, together with Virgin Media’s VoD service and DVR functionality allow its subscribers to personalize their programming. It also offers Virgin TV Anywhere, which allows its video subscribers to stream linear channels and access VoD services anywhere with WiFi connectivity. In addition, Virgin Media offers quadruple-play bundles.
Germany (Unitymedia KabelBW). We are the second largest cable television provider in Germany and the largest cable television provider in the federal states of Baden-Württemberg, North Rhine-Westphalia and Hesse based on the number of video cable subscribers. Unitymedia KabelBW’s video cable services are available to approximately 33% of the television households in Germany and it serves 18% of the total television market. Unitymedia KabelBW’s primary competition is from FTA television received via satellite. Unitymedia KabelBW also competes with the IPTV services over VDSL and FTTx and DTH of the incumbent telecommunications operator, Deutsche Telekom. Deutsche Telekom has approximately 2.1 million video subscribers in Germany, or 6% of the total television market, for primarily its IPTV services and has announced plans to target a total of 5 million customers with its IPTV services by 2015. Deutsche Telekom offers competitively priced triple-play bundles and promotional discounts for new customers. In addition, Vodafone Group Plc (Vodafone) bundles its IPTV service with its broadband offerings. Deutsche Telekom, Net Cologne GmbH and Professional Operators compete with Unitymedia KabelBW for housing association contracts. Professional Operators typically procure the broadcast signals they distribute from Unitymedia KabelBW or from DTH providers.

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Certain Professional Operators may also use such opportunities to build their own distribution networks or to install their own head-ends for receiving satellite signals. 
Other alternative distributors of television services are an increasing threat as well. To a lesser extent, Unitymedia KabelBW competes with the services of Sky Deutschland, which offers a digital premium subscription service to households that receive their basic television service via FTA satellite, cable or other technologies. In addition, there is a risk of competition for video services from commercial broadcasters and other content providers that currently pay Unitymedia KabelBW fees for transmitting their signals, but may seek to diversify their distribution on alternative platforms such as over-the-top video through high-speed internet connections. 
To enhance its competitive position, Unitymedia KabelBW launched the next generation HorizonTV platform in 2013. Similar to TiVo in the U.K., HorizonTV brings together television, internet, telephony and VoD content, without the need for separate devices. With the launch of HorizonTV, it realigned its digital packages and created new bundle options. For example, its core triple-play bundle includes an ultra high speed internet service of up to 100 Mbps. In 2013, it also increased the number of HD channels available to up to 60 channels. The bundle options allow subscribers to select various combinations of services to meet their needs. Promotional discounts are typically available to new subscribers.
Belgium (Telenet). Telenet is the sole provider of video cable services in its network area. Its video cable service is available to approximately 62% of the television households in Belgium and it serves approximately 45% of the total television market. It is the largest subscription television provider in Belgium based on the number of pay video subscribers. Telenet’s principal competitor is Belgacom NV/SA (Belgacom), the incumbent telecommunications operator, which has interactive digital television, VoD and HD service as part of its video offer, as well as a remote access service. Belgacom also offers double-play, triple-play and quadruple-play packages. It also includes certain sports programming (primarily football (soccer) related) at no additional charge. Approximately 26% of total television households in Belgium subscribe to Belgacom’s IPTV services over its DSL and VDSL networks. To a lesser extent, Telenet faces competition from M7 Group SA, branded TV Vlaanderen Digitaal, which is the largest DTH service provider in Telenet’s network area. Also, with the decision that Telenet and other Belgian cable operators must give alternative providers access to their cable networks, Telenet will be facing increased competition from these providers who may then be able to offer triple- and quadruple-play services as well. Telenet’s multimedia platform YeloTV, together with its extensive cable network, the broad acceptance of its basic cable television services and its extensive additional features, such as HD and DVR functionality and VoD offerings, may allow Telenet to compete effectively against alternative providers. In addition, Telenet offers competitively priced quadruple-play bundles, which include its mobile service. Telenet also continues to enhance its programming and simplified its bundle options to meet the needs of its customers.
The Netherlands. We are the second largest cable television provider in the Netherlands based on the number of video cable subscribers. UPC Netherlands’s video cable services are available to approximately 38% of the television households in the Netherlands and it serves 22% of the total television market. Competition from the DTT and VDSL services offered by the incumbent telecommunications provider, Royal KPN NV (KPN), is strong with KPN providing subscription video services to 26% of the total television households. KPN is the majority owner of the Netherlands DTT service, Digitenne. It also offers a VDSL service that includes VoD and DVR functionality, including restarting and second screen viewing. In addition, the FTTx networks of Reggefiber Group B.V. (a subsidiary of KPN) are a competitive factor in a number of cities and villages. Reggefiber Group B.V. continues to expand these networks within our service area. With its ability to offer bundled triple-play and quadruple-play services, and promotional discounts when its mobile service is included, KPN is a significant competitor.
To enhance its competitive position, UPC Netherlands rolled out improvements to its multimedia platform Horizon TV, which, together with its VoD service and DVR functionality, allows UPC Netherlands’ subscribers to personalize their programming. UPC Netherlands also gives its subscribers the ability to watch linear and VoD programming through a second screen application and to record programs remotely. UPC Netherlands continues to improve the quality of its programming through the type of programs available. In 2013, UPC Netherlands realigned its bundle options from which subscribers can select various combinations of services, including high-speed internet and fixed-line telephony options, to meet their needs. It also increased the number of HD channels available in its extended tier packages.
Switzerland. We are the largest cable television provider in Switzerland based on the number of video cable subscribers and the sole provider in substantially all of our network area. UPC Cablecom’s video cable services are available to approximately 64% of the television households in Switzerland and it serves 43% of the total television market. Our main competitor is Swisscom, the incumbent telecommunications operator, which provides IPTV services over DSL or FTTx networks to approximately 28% of all television households in Switzerland. Swisscom offers VoD services, DVR functionality, and HD channels, as well as the functionality to allow remote access to its video services, and has exclusive rights to distribute certain sports programming. In 2013, Swisscom increased the internet speeds available in its bundled

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offers, including up to 100 Mbps in areas served by its FTTx network. In addition, Swisscom continues to aggressively expand its FTTx network to Switzerland households in our footprint as well as in our partner network footprints. Due to a small program offering, competition from terrestrial television in Switzerland is limited, with DTT available primarily along the borders with France and Italy. DTH satellite services are also limited due to various legal restrictions such as construction and zoning regulations or rental agreements that prohibit or impede installation of satellite dishes. With respect to subscribers on partner networks, UPC Cablecom competes with other service providers for the contracts to serve these subscribers. To effectively compete, UPC Cablecom offers Horizon TV, which combines television, internet and fixed-line telephony on one device, giving subscribers the ability to personalize their programming. It also added a replay function, which is available to its digital video customers with the applicable set top box free of charge.
Other Western Europe. In Austria, we are the largest cable television provider based on the number of video cable subscribers. UPC Austria’s video cable service is available to approximately 37% of the television households in Austria and it serves 15% of the total television market. UPC Austria’s primary competition is from FTA television received via satellite. Competition from the VDSL services provided by the incumbent telecommunications operator, Telekom Austria AG (A1) (Telekom Austria), and from DTH satellite services offered by Sky Deutschland also continue to increase. At various times, Telekom Austria offers promotional discounts for its VDSL service, which includes advanced features, such as VoD, when taken as part of either a double- or triple-play bundle. To stay competitive, UPC Austria offers its basic digital service unencrypted and realigned its bundle offers in 2013 to include additional HD channels and increased internet speeds from 75 Mbps for its core triple-play bundle to a top speed of up to 250 Mbps.
UPC Ireland is the sole provider of video cable services in Ireland. UPC Ireland’s video cable service is available to approximately 52% of the television households in Ireland and it serves 23% of the total television market. UPC Ireland’s primary competition for video customers is from BSkyB, which provides DTH satellite services to 39% of the television households in Ireland and launched triple-play services in 2013. To gain subscribers for its triple-play services, BSkyB offers promotional discounts. UPC Ireland also faces potential competition from a recently launched over-the-top video service by Eircom Limited and smaller video providers, including providers using FTTx networks. Although FTA DTT is now available in most of Ireland, primarily through Ireland’s national public broadcaster, Raidió Teilifís Éireann, competition is limited due to its small programming offering. To enhance its competitive position, UPC Ireland launched the next generation Horizon TV in August 2013. With the launch of Horizon TV, UPC Ireland realigned its bundle offers, including increasing the broadband internet speed to 120 Mbps for its mass market bundles.
Central and Eastern Europe. We are the largest cable television provider in Poland based on the number of video cable subscribers. UPC Poland’s video cable services are available to approximately 20% of the television households in Poland and it serves 9% of the total television market. In providing video services, UPC Poland competes primarily with DTH service providers, including the largest DTH providers, Cyfrowy Polsat SA and NC+ platform (owned by the Vivendi Group). Cyfrowy Polsat SA and NC+ serve 26% and 16%, respectively, of the television households in Poland. The DTH service provider Orange Poland, a subsidiary of France Telecom S.A., is another significant competitor. In addition, UPC Poland competes with other cable operators with triple-play services, who have overbuilt portions of UPC Poland’s operations. One of these companies is Vectra SA, which offers aggressively priced double- and triple-play bundles. To enhance its competitive position, UPC Poland realigned its video offers with additional HD channels and increased its broadband internet download speeds in its bundled services and offers mobile service for a quadruple-play. For example, it increased its broadband speeds to 120 Mbps in its core triple-play bundle. In addition, UPC Poland began offering its basic digital service unencrypted in August 2013. Promotional discounts are available, including discounts for bundled services.
UPC Hungary’s video cable service is available to approximately 41% of the television households in Hungary and it serves 17% of the total television market in Hungary. Our subsidiary, UPC DTH, also provides satellite services in Hungary, in competition with other DTH providers. One of these, Digi TV, is an aggressive competitor. Digi TV’s DTH services can reach all of UPC Hungary’s cable service area, as well as UPC DTH’s service area, and it has overbuilt approximately half of UPC Hungary’s cable service areas with its own cable network. UPC Hungary also faces competition from the incumbent telecommunications company Magyar Telekom, a subsidiary of Deutsche Telekom. Magyar Telekom offers a VDSL service, including a VoD service, to its internet subscribers. With its ability to offer bundled triple-play and quadruple-play services, including its DTH video content, Magyar Telekom is a significant competitor. To meet such competition, UPC Hungary emphasizes its competitively priced bundles, which have been enhanced with increased broadband speeds of up to 240 Mbps with up to 120 Mbps included in its core bundle offers. It also offers DVR functionality and HD and VoD services. Of the television households in Hungary, 8% subscribe to Digi TV’s DTH service, 12% subscribe to Digi TV’s cable service and 18% subscribe to Magyar Telekom’s DTH or VDSL service. UPC DTH serves 7% of the television households in Hungary with its DTH service.

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With the discontinuation of FTA analog services in the Czech Republic and Slovakia, DTH services have increased significantly in popularity, with M7 Group SA (SkyLink and CSLink) being the main provider. This company provides DTH services to approximately 37% and 35% of the television households in the Czech Republic and Slovakia, respectively. As in Hungary, Digi TV is also an aggressive competitor in the Czech Republic and Romania. Digi TV provides DTH services to 5% and 16% of the television households in the Czech Republic and Romania, respectively. In Slovakia, we compete with the DTH service provider, Slovak Telekom a.s., a subsidiary of Deutsche Telekom, which offers exclusive sports channels and serves 14% of the television households in Slovakia. UPC DTH provides DTH services to 2%, 5% and 3% of the television households in the Czech Republic, Romania and Slovakia, respectively. To stay competitive, UPC DTH offers pre-paid DTH services in the Czech Republic and Slovakia, as well as a prepaid product through FocusSat in Romania. In Romania, competition also comes from DTH services offered by Rom Telecom SA, the incumbent telecommunications company, with 11% of the television households.
Of the television households in the Czech Republic, Romania and Slovakia, 10%, 12% and 9%, respectively, subscribe to our video cable service. Our cable services are available to the television households in each of these countries as follows: 31% in the Czech Republic, 33% in Romania and 22% in Slovakia. In addition to its DTH services in Romania, Digi TV continues to overbuild portions of our cable network with its own cable network. UPC Czech competes with the incumbent telephone company’s VDSL service and several other operators that provide DTH services and a number of local ISPs that provide IPTV services over FTTx networks. Providers of IPTV services over FTTx networks can reach approximately 62% of the households passed by our cable network in the Czech Republic. Of the television households in Romania, 29% subscribe to Digi TV’s cable service. In Slovakia, a number of ISPs make video services available to a majority of the homes passed by our cable networks. In particular, Slovak Telekom and Orange Slovensko a.s., a subsidiary of France Telecom S.A., have overbuilt homes passed by our cable network with their FTTx networks and offer triple-play packages through these networks.
FTA broadcasters are also significant competitors in the Czech Republic and in Slovakia. Subscribers in these countries tend to be more price sensitive than in other European markets. In particular, almost 100% of the Czech Republic can receive DTT for free or a comprehensive satellite service for a minimal recurring monthly fee. To address such sensitivity and meet competition, our operations in Central and Eastern Europe offer enhanced digital services, such as expanded VoD services, HD channel offerings and certain premium channels at no additional charge. In addition, UPC Czech and UPC Romania have realigned their bundle offers to include increased broadband internet speeds of up to 120 Mbps and 150 Mbps, respectively, in their core triple-play bundles. Promotional discounts are available, particularly on bundled options. Also, CI+ cards for DTH only products are available in the Czech Republic and in Slovakia.
Latin America
In Latin America, our principal competition is the provision of video services from DTH satellite providers, where we compete with established satellite platforms, as well as other pay television providers. Over the top viewing is also a competitive factor.
Chile. In Chile, we are the largest cable television provider based on number of video cable subscribers. VTR GlobalCom’s video cable services are available to approximately 61% of the Chilean television households and it serves 21% of the total television market in Chile. VTR GlobalCom competes primarily with DTH service providers in Chile, including the incumbent Chilean telecommunications operator Compañia de Telecomunicaciones de Chile SA using the brand name Movistar (Movistar), Claro Chile S.A., a subsidiary of América Móvil, S.A.B. de C.V. (Claro), and DirecTV Chile. Movistar offers double-play and triple-play packages using DTH for video and ADSL for internet and fixed-line telephony and, with mobile services, quadruple-play packages. On a smaller scale, Movistar also offers IPTV services over FTTx networks in Chile. Claro offers triple-play packages using DTH and, in most major cities in Chile, through a hybrid fiber coaxial cable network. It also offers mobile services for quadruple-play packages. Claro is an aggressive competitor targeting video subscribers, including VTR GlobalCom subscribers, with low priced video packages. Other competition comes from video services offered by or over the networks of fixed-line telecommunications operators using DSL or ADSL technology. Of the Chilean television households, 10%, 7% and 8% subscribe to the DTH services of Movistar, Claro and DirecTV Chile, respectively. To enhance its competitive position, VTR GlobalCom offers VoD, catch-up television, DVR functionality, premium HD channels, pay-per-view and a variety of premium channels as value added services that can be purchased by VTR GlobalCom’s video cable customers. These services and its variety of bundle options, including internet and telephony, enhance VTR GlobalCom’s competitive position. 
Puerto Rico. Liberty Puerto Rico is the largest provider of video cable services in its markets and the third largest provider of video services in Puerto Rico. Its video cable service is available to approximately 58% of the television households in Puerto Rico and it serves 17% of the total television market in Puerto Rico. Liberty Puerto Rico’s primary competition for video customers is from DTH satellite providers DirecTV and Dish Network Corporation. These competitors provide DTH satellite services to an aggregate of 48% of the television households in Puerto Rico. Dish Network Corporation

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is an aggressive competitor, offering low introductory offers, free HD channels and in its top tier packages a multi-room DVR service for free. DirecTV is also a significant competitor offering similar programming in Puerto Rico as it offers in the United States. In order to compete, Liberty Puerto Rico has increased the number of its HD channels, improved the functionality of its electronic program guide, and expanded its VoD offerings. In 2013, Liberty Puerto Rico increased its internet speeds in its bundle offers with download speeds of up to 60 Mbps in its core bundles. In addition, it plans to offer its customers the ability to view programming remotely and to offer the latest technology.
Internet
With respect to broadband internet services and online content, our businesses face competition in a rapidly evolving marketplace from incumbent and non-incumbent telecommunications companies, mobile operators and cable-based ISPs, many of which have substantial resources. The internet services offered by these competitors include both fixed-line broadband internet services using DSL or FTTx and wireless broadband internet services, in a range of product offerings with varying speeds and pricing, as well as interactive computer-based services, data and other non-video services offered to homes and businesses. With technological developments, competition from wireless services using various advanced technologies has become significant as well. Recently competitors have started offering high-speed mobile data via LTE wireless networks in certain of our markets. In addition, other wireless technologies, such as WiFi, are becoming more prevalent. We are also seeing intense competition in Europe from mobile carriers that offer mobile data cards allowing a laptop user to access the carrier’s broadband wireless data network with varying speeds and pricing. These wireless services are in response to the trend across Europe toward mobile internet.
Our strategy is speed leadership, including increasing the maximum speed of our connections, offering varying tiers of service and varying prices and offering a variety of bundled product offerings and a range of value added services. In most of our operations we have launched new bundling strategies, including speeds of 100 Mbps or more at mass market price points and ultra high-speed internet with speeds of generally up to 250 Mbps to compete with VDSL and FTTx initiatives. The focus continues to be on high-end internet products to safeguard our high-end customer base and allow us to become more aggressive at the low- and medium-end of the internet market. By fully utilizing the technical capabilities of DOCSIS 3.0 technology, we can compete with local FTTx initiatives and create a competitive advantage compared to DSL infrastructures on a national level and LTE initiatives as they expand to a national level.
Europe
Across Europe, our key competition in this product market is from the offering of broadband internet products using various DSL-based technologies both by the incumbent phone companies and third parties. The introduction of cheaper and ever faster fixed-line broadband offerings is further increasing the competitive pressure in this market. Wireless broadband services, such as LTE, are also taking a foothold in a number of countries using high-speed mobile networks and high-speed downlink packet access systems. 
In the U.K., we have a number of significant competitors in the market for broadband internet services. For example, BT provides broadband internet access services over its own DSL network and is currently rolling out an FTTx network. In addition, BT has recently announced its intention to expand and accelerate FTTx deployments, which will allow its retail arm, and its wholesale customers, to offer ultra high speed broadband services. Where fully deployed, operators are able to offer download speeds of up to 330 Mbps. BT Openreach, a division of BT, is also expanding BT’s FTTx to most of the U.K. BT Openreach manages BT’s local access network and provides competitors, including Virgin Media, access to BT’s networks.
Operators such as BSkyB, TalkTalk Telecom Group plc and Everything Everywhere Limited deploy their own network access equipment in BT exchanges via a process known as local loop unbundling (LLU). This allows an operator to reduce the recurring operating costs charged by BT by reducing the proportion of traffic that must travel directly over BT’s network. LLU deployment requires a substantial capital investment to implement and requires a large customer base to deliver a return on investment. In addition to the competition and pricing pressure in the broadband market arising from LLU, competition from mobile broadband is increasing. For example, Everything Everywhere Limited has announced that its LTE coverage will reach 98% of the U.K. population by the end of 2014.
Of these broadband internet providers, BT is the largest, serving 32% of the total market in the U.K. Virgin Media serves 20% of the total broadband market in the U.K. To effectively compete, Virgin Media is expanding its ultra high-speed services and has announced that in February 2014, it will increase its download speeds to up to 152 Mbps. Virgin Media offers its internet service on a standalone basis or through bundled offerings that include video, fixed-line telephony and mobile voice and data services at attractive price points.
In Germany, the competition for broadband internet services is particularly intense. Each of Deutsche Telekom, United Internet AG, Vodafone Germany (a subsidiary of Vodafone) and Telefónica Germany Holding AG (Telefónica Germany) are significant

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competitors. Deutsche Telekom is upgrading its network to a transmission speed of up to 100 Mbps and provides services to nearly half of the broadband internet subscribers through its network. United Internet AG and Vodafone Germany provide services to 12% and 11%, respectively, of the broadband internet subscribers in Germany. We also face increased competition from mobile broadband operators, including Deutsche Telekom, Vodafone Germany and Telefónica Germany, each of which offer mobile services through LTE wireless systems. Deutsche Telekom, alone and in partnership with others, including Vodafone Germany, has also announced plans to use its VDSL network with vectoring technology to offer increased speeds. Unitymedia KabelBW serves 9% of the total broadband internet market in Germany. To effectively compete, Unitymedia KabelBW is expanding its ultra high-speed internet services and increased its download speeds for its core package to up to 100 Mbps. It also offers a service with up to 150 Mbps. Unitymedia KabelBW offers its internet service on a stand alone basis or together with fixed-line telephony at attractive rates and through bundled offerings that include digital video and fixed-line telephony. Unitymedia KabelBW also offers mobile voice and data services.
In Belgium, internet access penetration is higher than in most European markets causing intense competition between the two primary broadband internet technologies, cable and DSL. Telenet’s primary competitor is the DSL service provider Belgacom and other DSL service providers. Approximately 45% of Belgium’s broadband internet subscribers use Belgacom’s DSL service with download speeds up to 30 Mbps. Also, mobile internet use is increasing. To compete, Telenet promotes its high-speed internet with attractively priced multiple-play bundles, offering download speeds from 30 Mbps to 120 Mbps. It is the fastest internet service provider in its footprint and approximately 26% of its broadband internet customers subscribe to the high-speed internet service, which includes access through in-home WiFi and Telenet provided public WiFi. Telenet provides broadband internet service to 39% of the broadband internet market in Belgium.
In the Netherlands, we face competition from KPN, the largest broadband internet provider, and to a lesser extent, the telecommunications company, Tele2 Netherlands Holding NV, as well as operators using LLU. KPN offers ultra high-speed internet services with download speeds of up to 80 Mbps over its DSL network. Between its DSL network and FTTx network, KPN internet services, with download speeds of up to 40 Mbps, are available to approximately 80% of all the households in the Netherlands. KPN also offers ultra high speed internet services of 100 Mbps on its existing FTTx network and 500 Mbps in new FTTx areas. In 2014, it plans to deploy 500 Mbps on its existing FTTx network as well. In 2014, KPN also plans to increase its download speeds on its DSL network to 100 Mbps and launch VDSL with vectoring. KPN is the leading mobile broadband provider with its competitively priced mobile internet products and launched LTE services in 2013, which will provide nationwide coverage by the end of the first quarter of 2014. KPN serves 42% and UPC Netherlands serves 15%, respectively, of the total broadband internet market in the Netherlands. To keep competitive, UPC Netherlands is promoting faster speeds than its DSL competitors at competitive prices and includes its basic digital video service to subscribers of its internet services at no additional charge. In the realignment of its bundles, UPC Netherlands increased its broadband internet speed to 120 Mbps for its mass market triple-play bundle. It also launched mobile data in February 2012 and is testing a 500 Mbps internet offer in select locations.
In Switzerland, Swisscom is the largest provider of broadband internet services, with an estimated market share of 56% of all broadband internet customers, and is our primary competitor. Swisscom internet customers have access to its video content free of charge through its internet portal. It is also expanding its FTTx network, through which it can offer download speeds of up to 100 Mbps and recently launched its 1 Gbps offer to customers on its new FTTx network. The next significant competitor is Sunrise Communications AG with 11% of broadband internet customers. UPC Cablecom serves 20% of broadband internet subscribers in Switzerland. In connection with the launch of Horizon TV, UPC Cablecom increased its download speeds to 150 Mbps in January 2013 and seeks to distinguish itself through competitively priced bundled offerings, including digital video, fixed-line telephony services and its ultra high-speed internet services. It also offers ultra high-speed internet with download speeds of up to 500 Mbps in select markets.
UPC Austria’s largest competitor with respect to broadband internet services is the incumbent telecommunications company, Telekom Austria, with approximately 60% of the broadband internet subscribers in Austria. In addition, Telekom Austria is expanding its DSL network and planning to use VDSL technology with vectoring to increase its download speeds to up to 70 Mbps. UPC Austria’s share of such market is 19%. The mobile broadband services of Telekom Austria are also a competitive factor. Telekom Austria is the largest mobile broadband provider serving 44% of the mobile broadband subscribers that use a 3G network. In addition, UPC Austria faces competition from LLU and other mobile broadband operators. As a result, the competition in the broadband internet market is intense. Competitors in the Austrian broadband internet market are focusing on speed and pricing to attract customers. UPC Austria uses its ultra high-speed internet services and competitively priced bundles to encourage customers from other providers to switch to UPC Austria’s services. It also offers promotional discounts for its mid-tier service.
Mobile data card providers have gained market share throughout Europe. For example, in Ireland, Telefónica O2 Ireland Limited, a leading mobile telephony provider, offers a range of mobile internet products at competitive prices. Outside of mobile internet, UPC Ireland’s most significant competitor is the fixed-line incumbent, Eircom Limited, with 46% of the broadband internet market in Ireland. In 2013, Eircom Limited increased its download speeds to up to 100 Mbps through its expanded VDSL

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network, which passes approximately 700,000 homes at December 31, 2013. UPC Ireland’s share of total broadband internet subscribers in Ireland is 31%. To effectively compete, UPC Ireland realigned its bundles, including increasing the download speeds of its internet services to up to 120 Mbps in its mass market bundles. It also launched Horizon TV in August 2013.
In Central and Eastern Europe, our principal competitors are DSL operators and cable companies that are overbuilding our cable network. In Poland, our principal competitors are Orange Poland and Vectra SA. In Hungary, the primary competitors are the incumbent telecommunications company, Magyar Telekom and Digi TV. In addition, in these countries, as well as in our other Central and Eastern European operations, we face increased competition from mobile broadband operators. In all of our Central and Eastern European markets, we are using our ultra high-speed internet service to attract and retain customers. In addition, promotional discounts are a big part of our internet service offerings, as well as with our competitors.
Latin America
In Chile, VTR GlobalCom faces competition primarily from non-cable-based internet service providers such as Movistar and Claro. VTR GlobalCom is experiencing increased pricing and download speed pressure from Movistar and Claro and more effective competition from these companies with the bundle of their internet service with other services. Mobile broadband competition is significant as well. In 2013, Claro launched its LTE network for high-speed mobile data. In response to the availability of mobile data in Chile, VTR GlobalCom has more than doubled its internet speeds with a high-speed internet offering of up to 120 Mbps. VTR GlobalCom’s share of the broadband internet market in Chile is 37%, compared to 41% for Movistar. To effectively compete, VTR GlobalCom is expanding its two-way coverage and offering attractive bundling with fixed-line telephony and digital video service.
Fixed-Line Telephony and Mobile Services
With respect to fixed-line telephony services, our businesses continue to compete against the incumbent telecommunications operator in each country. These operators have substantially more experience in providing fixed-line telephony and mobile services, greater resources to devote to the provision of fixed-line telephony services and long-standing customer relationships. In addition, mobile telephony providers are making significant advances in all our areas of operations and over-the-top telephony is becoming a competitive factor. In many countries, our businesses also face competition from other cable telephony providers, FTTx-based providers or other indirect access providers. Competition in both the residential and business fixed-line telephony markets will increase with certain market trends and regulatory changes, such as general price competition, the offering of carrier pre-select services, number portability, continued deregulation of telephony markets, the replacement of fixed-line with mobile telephony, and the growth of VoIP services. Carrier pre-select allows the end user to choose the voice services of operators other than the incumbent while using the incumbent’s network. We seek to compete on pricing as well as product innovation, such as telephony apps that allow customers to make and receive calls from their fixed-line call packages on smartphones. We also offer varying plans to meet customer needs and various bundle options with our digital video and internet services. In addition, we offer mobile voice and data services in the U.K., Belgium, Chile, Germany and Poland. With consumers increasingly moving towards mobile services, we continue to explore opportunities to offer mobile services in our other operations.
Europe
Across Europe, our fixed-line and mobile telephony businesses are generally small compared to the existing business of the incumbent telephone company. The incumbent telephone companies remain our key competitors but mobile operators and other VoIP operators offering service across broadband lines are also significant competitors in these markets. Generally, we expect telephony markets to remain extremely competitive. 
Our fixed-line telephony strategy in Europe is focused around value leadership, and we position our services as “anytime” or “any destination.” Our portfolio of calling plans include a variety of options designed to meet the needs of our subscribers. Such options include unlimited network, national or international calling, unlimited off-peak calling and minute packages, including calls to fixed and mobile phones. We also use our bundled offerings to help promote our telephony services.
In the U.K., we compete primarily with BT in providing fixed-line telephony services to residential customers in the U.K. BT occupies an established market position as the former state provider. We also compete with other telecommunications companies that provide fixed-line telephony services. These include TalkTalk Telecom Group plc and BSkyB, and mobile telephone operators such as Everything Everywhere Limited and Vodafone who lease access to BT’s network. For our mobile service in the U.K., we also face competition from these mobile network operators as well as other MVNOs. Everything Everywhere Limited became the first U.K. mobile network operator to launch LTE in October 2012, with Vodafone and others launching their LTE services in 2013. Virgin Media is responding to such competition by introducing “Smart Call”, a WiFi-calling application that allows customers to use inclusive fixed-line call packages on smartphones. Virgin Media’s share of the fixed-line telephony market in the U.K. is 14%.

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Deutsche Telekom is the dominant fixed-line telephony provider in Germany; however, telephony services provided through alternative technologies and mobile telephony services have caused competition in the telephony market to be intense. As a result, the market for residential telephony service is price sensitive. To address this competitive market, we use innovative bundling options to encourage customers to switch to Unitymedia KabelBW services. The market share of the fixed-line telephony market for Unitymedia KabelBW is 7%.
In Belgium, Belgacom is the dominant fixed-line telephony provider with 67% of the fixed-line telephony market. It is also a significant competitor in the mobile telephony market, having recently launched 4G services in select markets. To gain market share, we emphasize customer service and provide innovative plans to meet the needs of our customers, such as a flat fee plan offered in our bundle options (free off-peak calls to fixed-lines in Belgium, plus 2,000 minutes for calls to mobile in Belgium, fixed and mobile in Europe, the U.S. and Canada, and fixed in Morocco and Turkey). Subscribers to our fixed-line telephony service may also make free off-peak calls to mobile lines in Belgium, Europe, the U.S. and Canada. We also offer competitively priced mobile telephony where we launched new mobile rate plans that include a wealth of voice minutes, text messages and mobile data. We compete with other fixed-line operators and with mobile operators, including Belgacom, in the provision of telephony and mobile services in Belgium. Telenet’s share of the fixed-line telephony market in Belgium is 23%.
In the Netherlands, KPN is the dominant fixed-line telephony provider and is expanding significantly its mobile services as well, with the launch of LTE services in 2013. KPN’s LTE network will be available throughout the Netherlands in 2014. All of the large multiple system operators, including UPC Netherlands, as well as ISPs, offer VoIP services and continue to gain market share from KPN’s fixed-line services. UPC Netherlands also entered the mobile market with the launch of mobile data in 2012 and plans to expand this service to include voice. In Switzerland, we are the largest VoIP service provider, but Swisscom is the dominant fixed-line telephony service provider. Sunrise Communications AG, which offers carrier pre-select services, is also a strong competitor. Each of these competitors also operate their own mobile telephony service and include their mobile products in bundles with fixed-line services. To meet the competition for fixed-line services, UPC Cablecom enhanced its portfolio with attractive bundle options. UPC Cablecom also plans to enter the mobile market. The market share of the fixed-line telephony market for UPC Netherlands is 14% and UPC Cablecom is 12%.
In Austria, Ireland and in our Central and Eastern European markets, the incumbent telephone companies dominate the telephony market. Most of the fixed-line competition to the incumbent telephone operators in these countries is from entities that provide carrier pre-select or wholesale line rental services. We also compete with ISPs that offer VoIP services and mobile operators. In Austria, we serve our subscribers with VoIP over our cable network, circuit-switched telephony services and DSL technology service over LLU. UPC Austria also plans to enter the mobile market. To gain market share, we promote our VoIP telephony service offerings in almost all of our European markets and in some markets we have enhanced our telephony services through unlimited calling options.
Latin America
In Chile, VTR GlobalCom faces competition from the incumbent telecommunications operator, Movistar, and other telecommunications operators. Movistar has substantial experience in providing telephony services, resources to devote to the provision of telephony services and long-standing customer relationships. Competition in both the residential and business telephony markets is increasing as a result of market trends and regulatory changes affecting general price competition, number portability, and the growth of VoIP services. VTR GlobalCom offers circuit-switched and VoIP telephony services over its cable network. VTR GlobalCom’s share of the residential and commercial fixed-line telephony market in Chile is 21% (36% for residential).
In Chile, an increasing number of consumers have gravitated towards mobile service, prompting us to add wireless plans to complement our existing menu of telecommunications services commencing in 2012. Claro, Movistar and Entel PCS Telecommunications SA are the primary companies that offer mobile telephony in Chile. VTR Wireless represents less than 1% of the mobile telephony market share in Chile, of which slightly more than half comprise post-paid accounts. Of these customers, 58% subscribe to at least one fixed-line VTR GlobalCom service. Competition in the Chilean mobile services market is increasing quickly, with new competitors providing services to customers using the MVNO model. There are four primary operators using the MVNO model: VTR Wireless, Móvil Falabella, Virgin Mobile Chile and GTD—Manquehue. We expect additional new competitors to begin providing mobile services using the MVNO model in the coming years. To enhance its competitive position, VTR GlobalCom entered into an agreement with VTR Wireless, which allows VTR GlobalCom to offer VTR Wireless mobile telephony services as part of its bundled offerings. VTR Wireless also offers its mobile telephony services on a stand alone basis and for a flat fee customers of either company have unlimited telephone calls to customers of the other company.

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Regulatory Matters
Overview
Video distribution, broadband internet, fixed-line telephony, mobile and content businesses are regulated in each of the countries in which we operate. The scope of regulation varies from country to country, although in some significant respects regulation in European markets is harmonized under the regulatory structure of the EU.
Adverse regulatory developments could subject our businesses to a number of risks. Regulation, including conditions imposed on us by competition or other authorities as a requirement to close acquisitions or dispositions, could limit growth, revenue and the number and types of services offered and could lead to increased operating costs and property and equipment additions. In addition, regulation may restrict our operations and subject them to further competitive pressure, including pricing restrictions, interconnect and other access obligations, and restrictions or controls on content, including content provided by third parties. Failure to comply with current or future regulation could expose our businesses to various penalties.

Europe
Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the U.K. are the Member States of the EU. As such, these countries are required to harmonize certain of their laws with certain EU rules. In addition, other EU rules are directly enforceable in those countries without any transposition into national law. Certain EU rules are also applicable across the European Economic Area, whose Member States are the EU Member States (excluding Croatia) as well as Iceland, Liechtenstein and Norway.
In the broadcasting and communications sectors, there has been extensive EU-level legislative action. As a result, most of the markets in Europe in which our businesses operate have been significantly affected by the regulatory framework that has been developed by the EU. The exception to this is Switzerland, which is not a Member State of the EU or the European Economic Area and is currently not seeking any such membership. Regulation in Switzerland is discussed separately below, as well as regulation in certain Member States in which we face regulatory issues that may have a material impact on our business.
EU Communications Regulation
The body of EU law that deals with communications regulation consists of a variety of legal instruments and policies (collectively referred to as the “Regulatory Framework”). The key elements of the Regulatory Framework are various legal measures, which we refer to as the “Directives”, that require Member States to harmonize their laws, as well as certain regulations that have direct effect without any transposition into national law.
The Regulatory Framework primarily seeks to open European markets for communications services. It harmonizes the rules for the establishment and operation of electronic communications networks, including cable television and traditional telephony networks, and the offer of electronic communications services, such as telephony, internet and, to some degree, television services. The Regulatory Framework does not generally address issues of content.
On December 18, 2009, the Official Journal of the EU published revisions to the Regulatory Framework. Such revisions should have been transposed into the laws of the Member States before May 25, 2011, although in practice this is an ongoing process. Despite their limited nature, the changes to the Regulatory Framework will affect us. Some changes are administrative. For example, a new body of European regulators has been created. Some new powers, however, have been given to national regulators, such as the right to mandate access to ducts without finding operators or service providers to have “Significant Market Power” (defined below). This power, in particular, could require us to open our ducts to competitors and not allow us to make use of all capacity in our ducts for our own needs, or could mean we get access to ducts of third parties instead of building our own ducts. Also, there will be enhanced powers for Member States to impose transparency obligations and quality of service requirements on ISPs, which may restrict our flexibility in respect of our broadband services.
Certain key provisions included in the current Regulatory Framework are set forth below. This description is not intended to be a comprehensive description of all regulation in this area.
Licensing and Exclusivity. The Regulatory Framework requires Member States to abolish exclusivities on communication networks and services in their territory and allow operators into their markets based on a simple registration. The Regulatory Framework sets forth an exhaustive list of conditions that may be imposed on communication networks and services. Possible obligations include, among other things, financial charges for universal service or for the costs of

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regulation, environmental requirements, data privacy and other consumer protection rules, “must carry” obligations, provision of customer information to law enforcement agencies and access obligations.
Significant Market Power. Certain of the obligations allowed by the Regulatory Framework apply only to operators or service providers with “Significant Market Power” in a relevant market. For example, the provisions of the Access Directive allow EU Member States to mandate certain access obligations only for those operators and service providers that are deemed to have Significant Market Power. For purposes of the Regulatory Framework, an operator or service provider will be deemed to have Significant Market Power where, either individually or jointly with others, it enjoys a position of significant economic strength affording it the power to behave to an appreciable extent independently of competitors, customers and consumers.
As part of the implementation of certain provisions of the Regulatory Framework, each Member State’s National Regulatory Authority (NRA) is required to analyze certain markets predefined by the EU Commission to determine if any operator or service provider has Significant Market Power. Until November 2007, there were 18 such markets but then the EU Commission adopted a new recommendation reducing the list of predefined markets to seven, subject to periodic review. This adjusted recommendation led to a reduction in regulation. Some NRAs, however, continue to maintain their analysis of some of the markets from the original list or perform analysis of markets not listed in the recommendation which requires the NRA to prove that additional requirements, the so called three-criteria test, are met. In October 2012, the EU published a questionnaire for public consultation on whether the recommendation should be revised. It is not known whether any changes will be made as a result of this process.
We have been found to have Significant Market Power in certain markets in which we operate and further findings are possible. In particular, in those markets where we offer telephony services, we have been found to have Significant Market Power in the termination of calls on our own network.
NRAs might seek to define us as having Significant Market Power in any of the seven predefined markets or they may define and analyze additional markets. In the event that we are found to have Significant Market Power in any particular market, an NRA could impose certain conditions on us. Under the Regulatory Framework, the EU Commission has the power to veto a finding by an NRA of Significant Market Power (or the absence thereof), which power also applies with respect to market definition, in any market whether or not it is included in the seven predefined markets.
Video Services. The regulation of distribution, but not the content, of television services to the public is harmonized by the Regulatory Framework. Member States are allowed to impose reasonable “must carry” obligations for the transmission of specified radio and television broadcast channels on certain operators under their jurisdiction. Such obligations should be based on clearly defined general interest objectives, be proportionate and transparent and be subject to periodic review. We are subject to “must carry” regulations in all European markets in which we operate. In some cases, these obligations go beyond what we believe is allowable under the Regulatory Framework. To date, however, the EU Commission has taken very limited steps to enforce EU law in this area, leaving intact “must carry” obligations that are in excess of what we believe to be allowed. We do not expect that there will be any reduction in the “must carry” regulations in the foreseeable future.
Net Neutrality/Traffic Management. Other current regulatory debates at the EU and national level include net neutrality/traffic management, as well as responsibilities for ISPs on illegal content or activities on the internet. With respect to net neutrality/traffic management, the EU Commission confirmed in April 2011 that no additional EU regulation is needed to preserve net neutrality. The EU Commission made this decision after concluding that the existing provisions of the Regulatory Framework on consumer transparency and the ability of regulators to impose a minimum quality of service on an operator should be given time to be tested by Member States. In December 2011, the Body of European Regulators for Electronic Communications (BEREC), the joint body of European telecommunications regulators, published non-binding guidelines on net neutrality and transparency. BEREC believes that transparency and the ability for end-users to easily switch providers is vital and recommends that operators should provide clear end-user information about service limitations and actual speeds. This decision, however, is still subject to ongoing political debate, and European or national regulation in this area may occur. If such regulations are adopted, our ability to offer our own internet services may be restricted.
On September 11, 2013, the EU Commission proposed a partial reform to the Regulatory Framework in its proposed regulation on the European single market for electronic communications. Under EU law, a regulation, unlike a Directive, is required to be implemented into national law without interpretation by the respective national government. This proposal is a substantial reform to the 2009 Regulatory Framework, notably in how regulatory powers for licensing, spectrum and consumer protection are divided between NRAs, BEREC and the EU Commission. The proposal does not, however, modify the Regulatory Framework for mandating access obligations on operators with Significant Market Power. With respect to broadband services, the proposal permits

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ISPs to charge content or application service providers for carriage in return for new prohibitions to the use of traffic management to block, slow down or degrade services or applications. There are also modifications to the rules on consumer protection that extend the circumstances under which subscribers can terminate their contracts without cost, which may restrict our flexibility in respect of our bundled service offerings. The proposed regulation is subject to approval by the European Parliament and by Member States in the European Council. The proposal is not a current priority for the majority of the Member States in the European Council and is unlikely to be adopted during the course of 2014.

EU Broadcasting Law
Although the distribution of video channels by a cable operator is within the scope of the Regulatory Framework, the activities of a broadcaster are harmonized by other elements of EU law, in particular the Audiovisual Media Services Directive (AVMS). Generally, broadcasts originating in and intended for reception within an EU Member State must respect the laws of that Member State. Pursuant to AVMS, however, EU Member States are required to allow broadcast signals of broadcasters established in another EU Member State to be freely transmitted within their territory so long as the broadcaster complies with the law of their home state. This is referred to as the country of origin principle. Under AVMS (a change from pre-existing rules), the country of origin principle applies also to non-linear services, such as VoD. Accordingly, we should be able, if we so elect, to offer our own VoD services across the European Economic Area based on the regulation of the country of origin. As a result, we could structure our business to have a single regulatory regime for all of our VoD services offered in Europe. In addition, when we offer third party VoD services on our network, it should be the business of the third party, in its capacity as provider of the services, and not us as the local distributor, that is regulated in respect of these services.
Although Member States should have transposed the requirements of AVMS into national law, and this has generally been completed, the practical effect is still not clear. Uncertainty still remains about the proper treatment of VoD from a practical perspective. Thus, there can be no assurance that the requirements on VoD will, in fact, operate in the manner described above in any individual Member State. As a result, we may face inconsistent and uncertain regulation of our VoD service in Europe.
AVMS also establishes quotas for the transmission of European-produced programming and programs made by European producers who are independent of broadcasters.  
Other European Level Regulation
In addition to the industry-specific regimes discussed above, our European operating companies must comply with both specific and general legislation concerning, among other matters, data protection, data retention and electronic commerce. Many of these regimes are, or will be, reviewed at the EU level.
Our European operating companies are also subject to both national and European level regulations on competition and on consumer protection, which are broadly harmonized at the EU level. For example, while our operating companies may offer their services in bundled packages in European markets, they are sometimes not permitted to make a subscription to one service, such as cable television, conditional upon a subscription to another service, such as telephony. They may also face restrictions on the degree to which they may discount certain products included in the bundled packages.
The EU Commission is imposing more mandatory requirements and encouraging voluntary solutions regarding energy consumption of the telecommunications equipment we provide our customers. We have been participating in discussions and studies regarding energy consumption with various parts of the EU Commission and with experts working on their behalf. In addition, we are working with suppliers of our digital set-top boxes to lower power consumption, as well as looking at possibilities through software to lower the power consumption of the existing fleet of digital set-top boxes. We also worked with a large group of companies to create a voluntary agreement on set-top box power consumption as an alternative to regulation. The European Commission formally recognized this voluntary agreement as a valid alternative to regulation on November 22, 2012. Nevertheless, legislation in this area may be adopted that could adversely affect the cost and/or the functionality of equipment we deploy in customer homes.
Pursuant to an EU regulation on standby power effective January 7, 2010 (the Standby Regulation), many devices are required to have either a low power standby mode or off mode unless it is inappropriate to have either such mode on the device. For this purpose, our set-top boxes and certain other equipment are equipped with an off switch. Beginning in January 2013, the Standby Regulation imposed further requirements on power management on certain devices we purchase and/or develop, which devices, namely the Horizon TV set-top box and any future set-top boxes, must comply with such requirements, unless it can be argued such further requirements are inappropriate. These additional requirements have necessitated additional software developments for our equipment and reduce the functionality of our equipment assuming the equipment’s default setting is maintained.

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Furthermore in August 2013, the EU Commission issued an amendment to the Standby Regulation called Networked Standby (No 801/2013), which will be effective as of January 1, 2015, with the aim of regulating, among others, the maximum power consumption of networked consumer equipment while in the so-called Networked Standby mode. As is the case with the Standby Regulation, these additional requirements may have an impact on cost and customer experience.
As part of the EU’s Radio Spectrum Policy Program, spectrum made available through the switch off of analog television has been approved for mobile broadband use beginning January 1, 2013. This spectrum, known as the “digital dividend,” is in the 700 - 862 MHz band. The terms under which this spectrum will become available will vary among the European countries in which we operate. Certain uses of this spectrum may interfere with services carried on our cable networks. If this occurs, we may need to: (1) avoid using certain frequencies on our cable networks for certain or all of our services, (2) make some changes to our networks, or (3) change the equipment which we deploy. In approving mobile broadband, however, the Radio Spectrum Policy Program states that the new mobile services must co-exist with existing services, such as cable and DTT, to avoid harmful interference. As a result, we have taken steps to be part of the Member States’ LTE mobile trials in order to develop mitigation techniques and to engage NRAs to launch regulatory dialogs with equipment manufacturers and mobile operators to develop co-existing networks. We have also requested Member States to prepare comprehensive national impact assessments when spectrum conditions are changed to ensure that the costs to prevent interference between the various services are balanced.
United Kingdom
In the U.K., the revised Regulatory Framework is implemented through (1) the Communications Act 2003, which regulates all forms of communications technology, whether used for telecommunications or broadcasting, and (2) the Wireless Telegraphy Act 2006, which regulates radio communications in the U.K. (including with respect to the spectrum, licensing arrangements, usage conditions and charges, license bidding and trading and enforcement and penalties). The Privacy and Electronic Communications Regulations 2003, as amended, implemented EU Directive 2002/58, which regulates the processing of personal data and the protection of privacy in the electronic communications sector.
Virgin Media is also subject to regulation under the U.K. Broadcasting Acts 1990 and 1996 and other U.K. statutes and subordinate legislation, including the Competition Act 1998 and the Enterprise Act 2002. On-demand programming is regulated by the Authority for Television On-Demand under a co-regulatory regime with the U.K. Office of Communications (Ofcom). The regulatory regime for on-demand programming is derived from the EU Audiovisual Media Services Directive.
Ofcom is the key regulatory authority for the communications sector in which Virgin Media operates. It is responsible for furthering the interests of consumers by promoting competition. Currently, the U.K. Office of Fair Trading also has jurisdiction with respect to competition matters. Pursuant to the Enterprise and Regulatory Reform Act 2013, effective April 1, 2014, the competition functions of the U.K. Office of Fair Trading, together with those of the U.K. Competition Commission, will be transferred to a new U.K. competition authority, the Competition and Markets Authority. The Competition and Markets Authority’s primary duty will be to promote competition, both within and outside the U.K., for the benefit of consumers.
The U.K. government has attempted to drive the deployment of super-fast broadband and the provision of basic broadband to 95% of the population of the U.K. by 2017 using money from the publicly funded BBC Licence Fee, under-spend from the Analogue TV Switch-Off Project and other sources of public investment to stimulate private investment. Two key projects are under way: (1) the Broadband Delivery Programme, which is focused on delivering broadband to areas that the market will not serve of its own accord (mainly rural areas); and (2) the Urban Broadband Fund, which is aimed at establishing “super connected” cities with internet capabilities of between 80 Mbps to 100 Mbps and comprehensive mobile broadband coverage. In 2013, the U.K. government announced the Superfast Extension Programme, which is designed to support the roll-out of broadband with download speeds of 30 Mbps or higher to 99% of the population of the U.K. by 2018.
Virgin Media lodged a formal challenge against the European Commission's decision to approve a project involving the deployment of a state-subsidized broadband network in the city of Birmingham in 2012. Based on assurances received from the U.K. government that no Urban Broadband Fund monies would be used to deploy telecommunications infrastructure in the U.K., such that Birmingham could not implement the network for which it had received European Commission approval, Virgin Media requested and was granted a stay in proceedings until December 31, 2015.
Ofcom is in the final stages of its triennial review of the Fixed Access markets (including Wholesale Local Access incorporating physical or passive network access via methods such as LLU and duct access) and Wholesale Broadband Access market (virtual or active network access via methods such as provision of wholesale managed service products). Proposals made by Ofcom in this review indicate that there is no substantive change in its approach to regulation. Therefore, we do not anticipate significant consequences for Virgin Media’s operations.

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We anticipate that, in line with Ofcom’s current proposals, BT will again be found to have Significant Market Power in the Wholesale Local Access market and at least one sub-national area of the Wholesale Broadband Access market and will be required to provide certain products and services on regulated terms, (including providing access to its ducts and poles infrastructure).
As a MVNO, Virgin Media is subject to EU regulations relating to retail prices for roaming services. These regulations set limits on certain wholesale and retail tariffs for international mobile voice roaming, SMS tariffs and data roaming within the EU, provides for greater levels of transparency of retail pricing information, imposes measures to guard against bill shock in respect of data roaming and sets maximum roaming rates within the EU. A new measure, effective July 1, 2014, will allow consumers to select an alternative provider for their EU roaming services. The measure is intended to increase competition for the provision of roaming services.
Mobile termination charges applied by mobile network operators are regulated by Ofcom under a Significant Market Power charge control condition. Under Virgin Media’s MVNO agreement, these changes in mobile termination charges are passed on to Virgin Media, which has experienced a reduction in revenue from such charges. Ofcom is in the process of reviewing mobile termination charges for the period of 2015-2018, and its current proposals suggest that rates will stabilize around current levels.

Germany
Germany has transposed the EU laws into national laws although under the German legal system competency is split between the Federal State (telecommunication law) and the German federal states (Bundesländer) (media law). The German Telecommunications Act broadly implemented the Regulatory Framework and covers the distribution of any signal by telecommunications networks encompassing television signals, internet data and telephony. The 2009 revisions to the Regulatory Framework by the EU were implemented by Germany in May 2012. The German Federal Network Agency (Bundesnetzagentur) is responsible inter alia for the regulation of the German telecommunications market. The Federal Cartel Office (FCO), the national competition authority (Bundeskartellamt), plays an important role with respect to infrastructure and media regulation. The FCO has powers to address competition issues in all markets, although in some cases, competition issues will be addressed by the German Federal Network Agency.
Regulation of the media falls within the legislative competence of the German federal states. The media laws of all 16 federal states have been partially harmonized by the State Broadcasting Treaty (Rundfunkstaatsvertrag). The State Broadcasting Treaty establishes the main framework of the German regulation of broadcast. Nearly every German state has established its own independent regulatory body, the state media authority (Landesmedienanstalt). The state media authorities are primarily responsible for licensing and supervision of commercial broadcasters and the allocation of transmission capacities for radio and television channels. They are also in charge of the regulation of carriage fees, conditional access systems, interfaces and the bundling of programs.
The allocation and use of analog cable transmission capacities for both radio and television channels are governed by the “must carry” rules of the respective states. The allocation of digital transmission capacities for digital television and radio channels are, however, primarily governed by the “must carry” rules of the State Broadcasting Treaty. The media law in the states of Baden-Württemberg, North Rhine-Westphalia and Hesse require Unitymedia KabelBW to carry at least 13, 25 and 30 analog channels, respectively, and also limits the possibility to convert these analog cable channels into digital channels.
The operation of conditional access systems for television services is governed by both the State Broadcasting Treaty and the German Telecommunications Act. Generally, operators must not unfairly obstruct or discriminate against broadcasters and other content providers through conditional access systems.
On December 15, 2011, the FCO approved the KBW Acquisition, subject to our agreement with the following conditions:
Unitymedia KabelBW committed to the distribution of basic digital television channels (as opposed to channels marketed in premium subscription packages) on its entire network in unencrypted form. This commitment, with which we have complied, generally covers free-to-air television channels in SD and HD and is consistent with the practice that had been adopted by KBW prior to the KBW Acquisition. If, however, FTA television broadcasters request their HD content to be distributed in an encrypted HD package, the encryption of FTA HD channels is still possible. In addition, we made a commitment that, through December 31, 2016, the annual carriage fees Unitymedia KabelBW receives for each such FTA television channel distributed in digital or simulcast in digital and analog would not exceed a specified annual amount, determined by applying the applicable rate card systems of Unitymedia KabelBW as of January 1, 2012.
Effective January 1, 2012, Unitymedia KabelBW waived its exclusivity rights in access agreements with housing associations with respect to the usage of infrastructures other than its in-building distribution networks to provide television, broadband internet or telephony services within the building.

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Effective January 1, 2012, upon expiration of the minimum term of an access agreement with a housing association, Unitymedia KabelBW transferred the ownership rights to the in-building distribution network to the building owner or other party granting access. In addition, Unitymedia KabelBW waived its right to remove its in-building distribution networks.
A special early termination right was granted with respect to certain of Unitymedia KabelBW’s existing access agreements (the Remedy HA Agreements) with the largest housing associations that cover more than 800 dwelling units and which had a remaining term of more than three years as of December 15, 2011. The total number of dwelling units covered by the Remedy HA Agreements was approximately 340,000 as of December 15, 2011. The special termination right may be exercised on or before September 30 of each calendar year up to the expiration of the current contract term, with termination effective as of January 1 or July 1 of the following year. If the special termination right is exercised, compensation will be paid to partially reimburse Unitymedia KabelBW for its unamortized investments in modernizing the in-building network based on an agreed formula. To the extent Unitymedia KabelBW is successful in obtaining renewals of the Remedy HA Agreements, we expect that these renewed contracts will contain pricing and other provisions that are somewhat less favorable to Unitymedia KabelBW than those in previous agreements. At December 31, 2013, approximately 14% of the dwelling units covered by the Remedy HA Agreements remain subject to the special termination right.

In January 2012, two of our competitors, including the incumbent telecommunications operator, each filed an appeal against the FCO regarding its decision to approve the KBW Acquisition. On August 14, 2013, the Düsseldorf Court of Appeal issued a ruling that set aside the FCO’s clearance decision. Although the Düsseldorf Court of Appeal did not grant the right to appeal against its ruling to the Federal Supreme Court, on September 16, 2013, we filed a formal request to appeal to the Federal Court of Justice seeking permission to appeal the Düsseldorf Court of Appeal’s decision and our reasoned submission was filed on December 16, 2013. Third parties have been given until March 21, 2014 to comment on our submission. The Düsseldorf Court of Appeal’s ruling is not legally binding until all appeals have been rejected. If we are not granted the right to appeal, or if any appeal is unsuccessful and the Düsseldorf Court of Appeal’s ruling to overturn the FCO clearance becomes final and binding, the KBW Acquisition would be remitted to the FCO for a new phase II review. The FCO would have the power to clear the deal subject to additional remedies or, although we do not expect either to be the outcome, to refuse clearance of the transaction or clear the transaction unconditionally. We will continue to pursue any available opportunity to appeal the Düsseldorf Court of Appeal’s ruling. We do not expect that the continued proceedings relating to these appeals will have any impact on the integration and development of our operations in Germany or the day-to-day running of our business. We cannot predict the final outcome of this appeal process, however, any new decision by the FCO with respect to the KBW Acquisition as a result of the Düsseldorf Court of Appeal’s ruling, including any decision that increases the existing conditions we are subject to in connection with the FCO’s initial approval of the KBW Acquisition or imposes additional conditions, could have a material adverse impact on our results of operations, cash flows or financial position.
The FCO has communicated to us that it is reviewing customary practices regarding the duration of contracts with multiple dwelling units for analog television services, including with respect to one such contract that the FCO had previously identified between Unitymedia KabelBW and a landlord as potentially being subject to amendment by order. The FCO indicated that the contract term of 10 years may be an infringement of European and German antitrust laws and that it is inclined to open a test case that could set a precedent for all (or almost all) market participants. We cannot predict the outcome of these FCO proceedings, however, any FCO decision that would limit the duration of our contracts with multiple dwelling units could have a material adverse impact on our results of operations, cash flows or financial position.
Unitymedia KabelBW has entered into numerous feed-in agreements with public and commercial broadcasters for the analog and digital non-pay and pay carriage of their signals. The most important feed-in agreements are with the public broadcasters (ARD and ZDF), Mediengruppe RTL Deutschland and ProSiebenSat.1 Media AG. In 2012, ARD and ZDF sent us notices purporting to terminate their feed-in agreements effective December 31, 2012. ARD and ZDF also announced that they do not intend to pay any feed-in fees after January 1, 2013, and that they expect their signals will continue to be distributed over our networks based on existing must carry regulations, which is applied to the majority of their television and radio channels. While we are seeking to negotiate with ARD and ZDF to reach acceptable agreements, we have rejected the termination notices and filed lawsuits for payment of carriage fees against ARD and ZDF. In addition, some private broadcasters are seeking to change the distribution model to eliminate the payment of carriage fees and instead require that cable operators pay license fees to broadcasters. In this regard, we are currently in negotiations with certain of the larger private broadcasters and we expect to reach agreements that are acceptable to all parties, although no assurance can be given that any of our agreements with broadcasters will be renewed or extended on financially equivalent terms, or at all.

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Belgium (Telenet)
Belgium has broadly transposed the Regulatory Framework into law. According to the electronic communications law of June 13, 2005, the Belgisch Instituut voor Post en Telecommunicate (the BIPT), the Belgian NRA, should perform the market analysis to determine which, if any, operator or service provider has Significant Market Power. In addition, the Federal Parliament prepared legislation to transpose the 2009 revisions to the Regulatory Framework, which became effective as of August 4, 2012.
Telenet has been declared an operator with Significant Market Power on the market for call termination on an individual fixed public telephone network. As of April 1, 2012, reciprocal termination rates have been imposed, which results in Telenet charging the interconnection rate of the incumbent telecommunications operator, Belgacom.
Although no determination has been made on whether Telenet has Significant Market Power on the market for call termination on individual mobile networks, its rates will be affected by rate limitations implemented by BIPT. In June 2010, BIPT imposed a steep rate reduction over the next two years resulting in (1) an initial 45% decline effective August 1, 2010, over the then average rate and (2) further declines to a rate in January 2013 that were approximately 79% less than the average rate implemented on August 1, 2010. As of January 1, 2013, mobile termination rates have been set by BIPT at 1.08 euro cents per minute, and to date 2014 rates have not been set.
In December 2010, the BIPT and the regional regulators for the media sectors (together, the Belgium Regulatory Authorities) published their respective draft decisions reflecting the results of their joint analysis of the broadcasting market in Belgium. After a public consultation, the draft decisions were submitted to the EU Commission. The EU Commission issued a notice on the draft decision that criticized the analysis of the broadcasting markets on several grounds, including the fact that the Belgium Regulatory Authorities failed to analyze upstream wholesale markets. It also expressed doubts as to the necessity and proportionality of the various remedies.
The Belgium Regulatory Authorities adopted a final decision on July 1, 2011, with some minor revisions. The regulatory obligations include (1) an obligation to make a resale offer at ‘’retail minus’’ of the cable analog package available to third party operators (including Belgacom), (2) an obligation to grant third-party operators (except Belgacom) access to digital television platforms (including the basic digital video package) at “retail minus,” and (3) an obligation to make a resale offer at ‘’retail minus’’ of broadband internet access available to beneficiaries of the digital television access obligation that wish to offer bundles of digital video and broadband internet services to their customers (except Belgacom).

After Telenet submitted draft reference offers regarding the obligations described above in February 2012, to which the Belgium Regulatory Authorities subsequently made their observations, launched a national consultation process and consulted with the EU Commission. Although the EU Commission expressed doubts regarding the analog resale offers on August 8, 2013, the EU Commission did not object to the decision on the reference offers. The Belgium Regulatory Authorities published the final decision on September 9, 2013. The regulated wholesale services must be available approximately six months after a third-party operator files a letter of intent and pays an advance payment to each cable operator. On December 27, 2013, wireless operator Mobistar submitted a letter of intent and has paid the advance payment on January 10, 2013. Accordingly, the reference offers could be operational as soon as the third quarter of 2014.

On April 2, 2013, the Belgium Regulatory Authorities issued a draft decision regarding the “retail-minus” tariffs of minus 35% for basic television (basic analog and digital video package) and minus 30% for the bundle of basic television and broadband internet services. A “retail-minus” method of pricing involves a wholesale tariff calculated as the retail price for the offered service by Telenet, excluding value-added taxes and copyrights, and further deducting the retail costs avoided by offering the wholesale service (such as costs for billing, franchise, consumer service, marketing, and sales). On October 4, 2013, the Belgium Regulatory Authorities notified a draft quantitative decision to the European Commission in which they changed the “retail-minus” tariffs to minus 30% for basic television (basic analog and digital video package) and to minus 23% for the bundle of basic television and broadband internet services. Even though the EU Commission made a number of comments regarding the appropriateness of certain assumptions in the proposed costing methodology, the Belgian Regulatory Authorities adopted such retail-minus tariffs on December 11, 2013.

Telenet filed an appeal against the July 2011 decision with the Brussels Court of Appeal. On September 4, 2012, the Brussels Court of Appeal rejected Telenet’s request to suspend the July 2011 decision pending the proceedings on the merits. Due to this rejection and the approval of the reference offers by the Belgium Regulatory Authorities, Telenet is now required to begin the process of implementing its reference offers. A final ruling on the merits can be expected in the second or third quarter of 2014. Telenet also filed an appeal with the Brussels Court of Appeal against such decision regarding the qualitative aspects of the reference offer.  A decision in this appeal should not be expected before the fourth quarter of 2014. There can be no certainty that Telenet’s appeals will be successful.


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The July 2011 decision aims to, and in its application may, strengthen Telenet’s competitors by granting them resale access to Telenet’s network to offer competing products and services, notwithstanding Telenet’s substantial historical financial outlays in developing the infrastructure. In addition, any resale access granted to competitors could (1) limit the bandwidth available to Telenet to provide new or expanded products and services to the customers served by its network and (2) adversely impact Telenet’s ability to maintain or increase its revenue and cash flows. The extent of any such adverse impacts ultimately will be dependent on the extent that competitors take advantage of the resale access ultimately afforded to Telenet’s network and other competitive factors or market developments.

The Netherlands

The Netherlands has an electronic communications law that broadly transposes the Regulatory Framework. According to this electronic communications law, Autoriteit Consument & Markt (ACM), formerly Onafhankelijke Post en Telecommunicatie Autoriteit, the Netherlands NRA, should perform a market analysis to determine which, if any, operator or service provider has Significant Market Power. In December 2011, ACM completed a market assessment of the television market in the Netherlands, and concluded that there were no grounds for regulation of that market. As a result, no new regulations relating to the television market may be proposed without a new analysis. In particular, ACM rejected previously filed requests from a number of providers to perform a new market analysis of the television market and this decision was upheld by the Dutch Supreme Administrative Court on November 5, 2012.

In May 2012, the Dutch Senate adopted laws that (1) provide the power to ACM to impose an obligation for the mandatory resale of television services and to the Commissariaat voor de Media to supervise the resale obligation introduced by these new laws and (2) provide for “net neutrality” on the internet, including limitations on the ability of broadband service providers to delay, choke or block traffic except under specific circumstances. These laws became effective on January 1, 2013 notwithstanding the above-described November 5, 2012 decision of the Dutch Supreme Administrative Court.

On October 24, 2012, the European Commission opened formal infringement proceedings against the Dutch government on the basis that the new laws pertaining to resale breach EU law. The Dutch government responded to the infringement proceedings on June 25, 2013 and the European Commission is currently reviewing the response. If such response is deemed to be unsatisfactory to the European Commission, it may refer the matter to the European Court of Justice. We agree with the EU that the new laws pertaining to resale are contrary to EU law and we, along with other market participants, will contest their application.

On January 29, 2014, a Dutch civil court, in a court proceeding initiated by UPC Netherlands, declared the resale obligation laws non-binding because they infringe EU law. The Dutch government has three months from January 29, 2014, to appeal the decision. The infringement proceeding at the European Commission against the Dutch government is still pending. We cannot predict the outcome of any appeal by the Dutch government of the civil court decision, or, if the decision was overturned, the effect on our results of operations, cash flows or financial position from any implementation of a resale regime, which would likely take several months or more.

On August 5, 2013, ACM published a new market analysis decision on call termination, which combines both the fixed termination market and the mobile termination market. The new tariffs became effective September 1, 2013. All providers of call termination on fixed and mobile networks in the Netherlands have been found to have Significant Market Power. The tariffs were set for both fixed and mobile termination and consist of a single tariff for the relevant three-year period without a glidepath. The Dutch Supreme Administrative Court in preliminary proceedings initiated by the mobile operators approved, consistent with its August 31, 2011 ruling, a costing methodology resulting in higher rates valid until the ruling in the appeal on the merits against the August 5, 2013 decision is published. Such ruling is expected in the third or fourth quarter of 2014.
Switzerland
Switzerland has a regulatory system which partially reflects the principles of the EU, but otherwise is distinct from the European regulatory system of telecommunications. The Telecommunications Act (Fernmeldegesetz) regulates, in general, the transmission of information, including the transmission of radio and television signals. Most aspects of the distribution of radio and television, however, are regulated under the Radio and Television Act (Radio und Fernsehgesetz). In addition, the Competition Act and the Act on Price Surveillance are potentially relevant to our business. With respect to energy consumption of electronic home devices, the Energy Act and the revised Energy Ordinance have been applicable since January 2010 to television set-top boxes as described below.
Under the Telecommunications Act, any provider of telecommunications services needs to register with the Federal Office of Communications. Dominant providers have to grant access to third parties, including unbundled access to the local loop. But this access regulation is restricted to the copper wire network of the incumbent, Swisscom. Therefore, such unbundling obligations

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do not apply to UPC Cablecom and other cable operators. Also, any dominant provider has to grant access to its ducts, subject to sufficient capacity being available in the relevant duct. At this time, only Swisscom has been determined to be dominant in this regard. All operators are obliged to provide interconnection and have to ensure interoperability of services.
In 2008, after various municipalities announced plans to rollout a fiber-to-the-home network, Swisscom announced its intention to roll out a national fiber-to-the-home network following the completion of its fiber-to-the-node networks in Switzerland. As a result, Swisscom has built its fiber-to-the-home network in several cities in cooperation with municipality-owned utility companies. Where no cooperation agreement has been reached, Swisscom is building its own fiber-to-the-home network. These cities include Zurich, Berne, Basle, Geneva, St. Gallen, Lucerne, Winterthur, Bellinzona, Freiburg and some very small municipalities. Outside of urban areas, Swisscom has announced that it will extend its fiber-to-the-node network by introducing vectoring, which allows Swisscom to offer speeds comparable to those offered by UPC Cablecom. Following a review of the telecommunications landscape, the Federal Government has determined that it is necessary to revise current regulations and announced plans to publish a draft of a revised telecommunications act by the end of 2015. Any such fiber roll out could lead to increased competition for UPC Cablecom.
Under the Radio and Television Act and the corresponding ordinance, cable network operators are obliged to distribute certain programs that contribute in a particular manner to media diversity. The Federal Government and the Federal Office of Communications can select up to 25 programs that have to be distributed in analog without the cable operator being entitled to compensation. A new Radio and Television ordinance became effective August 1, 2012, which allows cable operators to decrease the number of obligatory channels to be broadcasted in analog. A departmental ordinance was published which eliminates this regime for all foreign broadcasters as of June 1, 2013, and all other such regulation as of January 1, 2015. Additionally, there is no legal obligation to broadcast digital and analog in parallel as long as the digital offer is comparable to analog and does not force customers to incur additional costs.
UPC Cablecom’s retail customer prices are subject to review by the Swiss Price Regulator. In October 2012, UPC Cablecom announced an agreement with the Swiss Price Regulator pursuant to which UPC Cablecom will make certain changes to its service offerings in exchange for progressive increases in the price of its basic cable connection. In this regard, (1) effective November 1, 2012, UPC Cablecom began offering a basic tier of digital television channels on an unencrypted basis in its footprint and (2) effective January 3, 2013, for video subscribers who pay the required upfront activation fee, UPC Cablecom has made available, at no additional monthly charge, a 2.0 Mbps internet connection, which was an increase from the previously-offered 300 Kbps internet connection.  In addition, the monthly price for a cable connection increased by CHF 0.90 ($1.01) effective January 1, 2013 and a further increase of CHF 0.60 ($0.68) took effect on January 1, 2014.
Effective October 1, 2011, the Federal Council proposed a new regulation imposing power thresholds for set-top boxes. There are some exemptions and transition periods which apply in the short term to the set-top boxes we import into Switzerland. The Swiss regulation may not be in line with EU regulation, and it may be reconsidered as Switzerland tries to align itself with EU norms. If, however, such regulation remains in force, it may have an adverse effect on the business of UPC Cablecom as UPC Cablecom may face restrictions regarding the import of set-top boxes.
Chile
VTR GlobalCom is subject to regulation and enforcement by various governmental entities in Chile including the Chilean Antitrust Authority, the Ministry of Transportation and Telecommunications (the Ministry) through the Chilean Undersecretary of Telecommunications (SubTel), the National Television Council (CNTV) and Chile’s national consumer service (Sernac).
In addition to the specific regulations described below, VTR GlobalCom is subject to certain regulatory conditions which were imposed by the Chilean Antitrust Authority in connection with VTR GlobalCom’s combination with Metrópolis Intercom SA in April 2005. These conditions are indefinite and include, among others, (1) prohibiting VTR GlobalCom and its control group from participating, directly or indirectly through a related person, in Chilean satellite or microwave television businesses, (2) prohibiting VTR GlobalCom from obtaining exclusive broadcast rights, except for specific events, and (3) requiring VTR GlobalCom to offer its broadband capacity for resale of internet services on a wholesale basis.

Video
The provision of pay television services requires a permit issued by the Ministry. Cable pay television permits are granted for an indefinite term and are non-exclusive, and, because such permits do not involve radioelectric spectrum, they are granted without ongoing duties or royalties. VTR GlobalCom has permits to provide cable pay television services in the major cities, including Santiago, and in most of the medium-sized markets in Chile.


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Cable television service providers in Chile are free to define the channels and content included in their services and are not required to carry any specific programming, except as described below. However, CNTV may impose sanctions on providers who are found to have run programming containing excessive violence, pornography or other objectionable content. Pay television operators are directly responsible for violation of such prohibitions. Additionally, a bill to amend the Television Act, which we refer to as the TV Act Bill, which is currently pending in Congress, intends to require pay television providers to offer a certain quota of cultural content and to distribute public interest campaigns.
The TV Act Bill, which, among other things, is designed to introduce terrestrial digital television, seeks to establish a retransmission consent regime between broadcast television concessionaires and pay television operators. This regime would provide that once a broadcast operator achieves digital coverage of 85% of the population within its concession areas, the broadcast operator may require that pay television operators enter into an agreement for the distribution of its digital signals to be able to retransmit its signal. In addition, the TV Act Bill requires that the technical or commercial conditions imposed by broadcast operators not discriminate among pay television operators. Also, the TV Act Bill seeks to establish a must-carry regime requiring pay television operators to distribute up to four local broadcast television channels in each operating area. The channels that must be carried by any particular pay television operator are to be selected by CNTV.
The Chilean Consumer’s Rights Protection Law contains provisions that have been interpreted by Sernac to require that any increase in rates exceeding inflation must be previously accepted and agreed to by subscribers. Although VTR GlobalCom disagrees with this interpretation, in July 2012, VTR GlobalCom reached an agreement with Sernac, which permits VTR GlobalCom to make adjustments to its published rates twice per year to adjust for inflation. In addition, VTR GlobalCom may once a year propose to its existing subscribers additional changes to their rates. If a subscriber does not accept these proposed rate changes, VTR GlobalCom is permitted to terminate service delivery to the subscriber. In addition, the agreement with Sernac establishes the criteria upon which VTR GlobalCom may modify its channel line-up without the consent of subscribers.
Internet
In August 2010, a law on internet neutrality was passed, which prohibits “arbitrary blockings” of legal content, applications or services and the provision of differentiated service conditions according to the origin or ownership of the content or service provided through the internet. Additionally, the law authorizes ISPs to take measures to ensure the privacy of their users and provide virus protection and safety processes over their network, as long as these measures do not infringe antitrust laws. Additional measures were subsequently implemented, including obligations related to consumer information, traffic management policies applied by each ISP and internet quality of service requirements and notices required by law concerning the effective maximum and minimum traffic speeds offered under internet access plans.
In order to protect the constitutional rights of privacy and safety of communications, ISPs are prohibited from undertaking surveillance measures over data content on their networks. Also, special summary proceedings have been created in order to safeguard intellectual property rights against violations committed through networks or digital systems. These proceedings include measures designed to withdraw, disqualify or block infringing content in the ISP’s network or systems. The law also provides for the right of intellectual property owners to judicially request from ISPs the delivery of necessary information to identify the provider of infringing content.
Fixed-Line and Mobile Telephony Services
The Ministry also regulates telephony services. The provision of fixed-line and mobile telephony services requires a public telecommunications service concession. With respect to mobile services, in 2009, SubTel awarded VTR GlobalCom a license for 30 MHz of spectrum in the 1700/2100 MHz frequency band for the provision of wireless telephony services. The license has a 30-year renewable term. VTR GlobalCom transferred this license to VTR Wireless in 2012. On January 15, 2014, VTR Wireless received a letter from SubTel in which SubTel asserts that VTR Wireless is not in compliance with the terms of such wireless license. SubTel alleges that the terms of the wireless license require VTR Wireless to comply with certain minimum network coverage and traffic levels. VTR Wireless disagrees with SubTel’s assertions regarding the terms of the wireless license and intends to contest such assertions vigorously.
VTR GlobalCom has telecommunications concessions to provide fixed-line telephony in most major and medium-sized markets in Chile. Telephony concessions are non-exclusive and have renewable 30-year terms. The original term of VTR GlobalCom’s fixed-line telephony concessions expires in November 2025. Long distance telephony services are considered intermediate telecommunications services and, as such, are also regulated by the Ministry. VTR GlobalCom has concessions to provide this service, which is non-exclusive, for a 30-year renewable term expiring in September 2025. In Chile, fixed-line telephony communications between primary zones are domestic long distance calls. In October 2011, SubTel implemented the first phase of a ruling for the elimination of domestic long distance (for calls within the country) and reducing the local exchange zones from 24 to 13. On November 6, 2013, Law N°20,704 was enacted to provide for the complete elimination of domestic long

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distance calls. Pursuant to its terms, 120 days after its enactment SubTel must start a process to unify Chile into just one telephone service primary zone within 180 days thereafter. We believe this process could benefit VTR GlobalCom along with the Chilean fixed-line market as a whole in relation to VTR GlobalCom’s mobile telephony competition by providing fixed-line subscribers the ability to make phone calls throughout Chile without incurring into long-distance charges, thereby making VTR GlobalCom’s fixed-line telephony services more attractive.
There are no universal service obligations in Chile. However, local service concessionaires are obligated to provide telephony service to all customers that are within their service area or are willing to pay for an extension to receive service. All local service providers, including VTR GlobalCom, must give long distance telephony service providers equal access to their network connections at regulated prices and must interconnect with all other public services concessionaires whose systems are technically compatible.
As a general rule, fixed-line telephony service providers are free to establish the rates directly charged to their customers, unless the Chilean Antitrust Authority concludes that due to a lack of sufficient competition in the market, rates should be fixed by regulatory authorities. However, SubTel sets the maximum rates that may be charged by each operator for interconnect charges, access charges between operators for calls originating on one network that are completed through connections with one or more networks of other providers, and charges for network unbundling services. Rate regulation on interconnection charges is applicable to all fixed-line and mobile telephony companies, including VTR GlobalCom and VTR Wireless. The determination of the maximum rates that may be charged by operators for their fixed-line or mobile services are made on a case-by-case basis by SubTel and are effective for five years.
Other Chilean Regulation
Bundling. On December 18, 2012, the Chilean Antitrust Authority issued its regulation governing the on-net/off-net pricing practice in the mobile telephone industry and the offering of bundled telecommunication services. Pursuant to the terms of this regulation, as revised by the Chilean Supreme Court, mobile services may be sold jointly with fixed-line services. However, promotional discounts were not permitted for these double play offers. As for traditional bundling over the same platform (e.g., bundled fixed-line services such as our double- and triple-play packages, or bundled mobile services), this regulation provides that such services may be bundled, subject to certain price limitations. These limitations require that the total price for a bundle must be greater than the stand-alone price for the most expensive service included in the bundle. Also, when three or more services are bundled, the price for the bundle must be greater than the sum of the stand-alone prices for each service in the bundle, excluding the lowest priced service.
Telecommunication Services Proposal. In November 2011, SubTel published a proposal for a General Telecommunication Services Ruling. The purpose of this proposal is to regulate the offer of telecommunication services, including voice, internet access, and pay television, either alone or in bundles, from a consumer protection point of view. If enacted, the new regulation could involve significant changes in contracts with customers, new requirements regarding compensation in case of service failure, and new rules regarding treatment of customers’ personal information.
Minimum Standards on Quality of Service and Operation. From August 5 to September 4, 2013, SubTel submitted for public comment a draft of the Technical Fundamental Plan on Maintenance and Public Service Telecommunications Network Managing. This draft seeks to impose minimum standards on quality of service and operation of telecommunications networks, in general, and in some particular services: voice services; text and multimedia messages services; data transmission services; minimum coverage for mobile services; and digital terrestrial television minimum coverage. We are uncertain when SubTel will publish the final version of the plan.
Employees
As of December 31, 2013, we, including our consolidated subsidiaries, had an aggregate of approximately 35,000 full-time equivalent employees, certain of whom belong to organized unions and works councils. Certain of our subsidiaries also use contract and temporary employees, which are not included in this number, for various projects. We believe that our employee relations are good.
Financial Information About Geographic Areas
Financial information related to the geographic areas in which we do business appears in note 17 to our consolidated financial statements included in Part II of this Annual Report.

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Available Information
All our filings with the U.S. Securities and Exchange Commission (SEC) as well as amendments to such filings are available on our internet website free of charge generally within 24 hours after we file such material with the SEC. Our website address is www.libertyglobal.com. The information on our website is not part of this Annual Report on Form 10-K and is not incorporated by reference herein.
Item 1A. RISK FACTORS
In addition to the other information contained in this Annual Report on Form 10-K, you should consider the following risk factors in evaluating our results of operations, financial condition, business and operations or an investment in the shares of our company.
The risk factors described in this section have been separated into four groups:
risks that relate to the competition we face and the technology used in our businesses;
risks that relate to our operating in overseas markets and being subject to foreign regulation, including risks that relate to our redomiciliation in the U.K.;
risks that relate to certain financial matters; and
other risks, including risks that, among other things, relate to our capitalization and the obstacles faced by anyone who may seek to acquire us. 
Although we describe below and elsewhere in this Annual Report on Form 10-K the risks we consider to be the most material, there may be other unknown or unpredictable economic, business, competitive, regulatory or other factors that also could have material adverse effects on our results of operations, financial condition, business or operations in the future. In addition, past financial performance may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods.
If any of the events described below, individually or in combination, were to occur, our businesses, prospects, financial condition, results of operations and/or cash flows could be materially adversely affected.
Factors Relating to Competition and Technology
We operate in increasingly competitive markets, and there is a risk that we will not be able to effectively compete with other service providers. The markets for cable television, broadband internet, fixed-line telephony and mobile services in many of the regions in which we operate are highly competitive. In the provision of video services, we face competition from DTT broadcasters, video provided over satellite platforms, networks using DSL technology, FTTx networks and, in some countries where parts of our systems are overbuilt, cable networks, among others. Our operating businesses are facing increasing competition from video services provided by, or over the networks of, incumbent telecommunications operators and other service providers. As the availability and speed of broadband internet increases, we also face competition from over-the-top video content providers utilizing our or our competitors’ high-speed internet connections. In the provision of telephony and broadband internet services, we are experiencing increasing competition from the incumbent telecommunications operators and other service providers in each country in which we operate, as well as mobile providers of voice and data. The incumbent telecommunications operators typically dominate the market for these services and have the advantage of nationwide networks and greater resources than we have to devote to the provision of these services. Many of the incumbent operators are now offering double-play, triple-play and quadruple-play bundles of services. In many countries, we also compete with other operators using LLU to provide these services, other facilities-based operators and wireless providers. Developments in the DSL and other technology used by the incumbent telecommunications operators and alternative providers have improved the attractiveness of our competitors’ products and services and strengthened their competitive position. Developments in wireless technology, such as LTE (the next generation of ultra high-speed mobile data), are creating additional competitive challenges.
In some European markets, national and local government agencies may seek to become involved, either directly or indirectly, in the establishment of FTTx networks, DTT systems or other communications systems. We intend to pursue available options to restrict such involvement or to ensure that such involvement is on commercially reasonable terms. There can be no assurance, however, that we will be successful in these pursuits. As a result, we may face competition from entities not requiring a normal commercial return on their investments. In addition, we may face more vigorous competition than would have been the case if there were no government involvement.

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We expect the level and intensity of competition to continue to increase from both existing competitors and new market entrants as a result of changes in the regulatory framework of the industries in which we operate, advances in technology, the influx of new market entrants and strategic alliances and cooperative relationships among industry participants. Increased competition could result in increased customer churn, reductions of customer acquisition rates for some services and significant price competition in most of our markets. In combination with difficult economic environments, these competitive pressures could adversely impact our ability to increase or, in certain cases, maintain the revenue, average monthly subscription revenue per average RGU (ARPU), RGUs, operating cash flows, operating cash flow margins and liquidity of our operating segments.
Changes in technology may limit the competitiveness of and demand for our services. Technology in the video, telecommunications and data services industries is changing rapidly, including advances in current technologies and the emergence of new technologies. New technologies, products and services may impact consumer behavior and therefore demand for our products and services. The ability to anticipate changes in technology and consumer tastes and to develop and introduce new and enhanced products on a timely basis will affect our ability to continue to grow, increase our revenue and number of subscribers and remain competitive. New products, once marketed, may not meet consumer expectations or demand, can be subject to delays in development and may fail to operate as intended. A lack of market acceptance of new products and services which we may offer, or the development of significant competitive products or services by others, could have a material adverse impact on our revenue and operating cash flow.
Our property and equipment additions may not generate a positive return. The video, broadband internet and telephony businesses in which we operate are capital intensive. Significant additions to our property and equipment are