10-K 1 lg201510-k.htm 10-K 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, 2015
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.)
 
 
Griffin House, 161 Hammersmith Rd, London, United Kingdom
 
W6 8BS
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: +44.208.483.6449 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
Liberty Global Class A Ordinary Share, nominal value $0.01 per share
 
NASDAQ Global Select Market
Liberty Global Class B Ordinary Shares, nominal value $0.01 per share
 
NASDAQ Global Select Market
Liberty Global Class C Ordinary Shares, nominal value $0.01 per share
 
NASDAQ Global Select Market
LiLAC Class A Ordinary Share, nominal value $0.01 per share
 
NASDAQ Global Select Market
LiLAC Class B Ordinary Shares, nominal value $0.01 per share
 
OTC Link
LiLAC Class C Ordinary Shares, nominal 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.  ¨
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: $44.2 billion.
The number of outstanding ordinary shares of Liberty Global plc as of February 4, 2016 was:
 
Class A
 
Class B
 
Class C
Liberty Global ordinary shares
252,805,601

 
10,472,517

 
581,034,556

LiLAC ordinary shares
12,630,744

 
523,423

 
30,773,233


DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive proxy statement for the Registrant’s 2016 Annual General Meeting of Shareholders are incorporated by reference in Part III of this Form 10-K.
 



LIBERTY GLOBAL PLC
2015 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, serving 27.5 million customers across 14 countries at December 31, 2015. Through our wholly-owned subsidiary Virgin Media Inc. (Virgin Media), we provide video, broadband internet, fixed-line telephony and mobile services in the United Kingdom (U.K.) and Ireland. Through Ziggo Group Holding B.V. (Ziggo Group Holding) and Unitymedia GmbH (Unitymedia), each a wholly-owned subsidiary, and Telenet Group Holding N.V. (Telenet), a 56.9%-owned subsidiary, we provide video, broadband internet, fixed-line telephony and mobile services in the Netherlands, Germany and Belgium, respectively. Through our wholly-owned subsidiary, UPC Holding B.V. (UPC Holding), we provide video, broadband internet and fixed-line telephony services in seven other European countries and mobile services in four other European countries. In Chile, we provide video, broadband internet, fixed-line telephony and mobile services through our wholly-owned subsidiary VTR GlobalCom SpA (VTR). In Puerto Rico, we provide video, broadband internet and fixed-line telephony services through Liberty Cablevision of Puerto Rico LLC (Liberty Puerto Rico), a 60%-owned subsidiary.
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. (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.

On July 1, 2015, we completed the approved steps of the “LiLAC Transaction” whereby we (1) reclassified our then outstanding Class A, Class B and Class C Liberty Global ordinary shares (collectively, the Old Liberty Global Shares) into corresponding classes of new Liberty Global ordinary shares (collectively, the Liberty Global Shares) and (2) capitalized a portion of our share premium account and distributed as a dividend (or a “bonus issue” under U.K. law) our LiLAC Class A, Class B and Class C ordinary shares (collectively, the LiLAC Shares). Pursuant to the LiLAC Transaction, each holder of Class A, Class B and Class C Old Liberty Global Shares remained a holder of the same amount and class of Liberty Global Shares and received one share of the corresponding class of LiLAC Shares for each 20 Old Liberty Global Shares held as of the record date for such distribution and cash was issued in lieu of fractional LiLAC Shares.

The Liberty Global Shares and the LiLAC Shares are tracking shares. Tracking shares are intended by the issuing company to reflect or “track” the economic performance of a particular business or “group,” rather than the economic performance of the company as a whole. The Liberty Global Shares and the LiLAC Shares are intended to track the economic performance of the “Liberty Global Group” and the “LiLAC Group”, respectively (each as defined and described below). While the Liberty Global Group and the LiLAC Group have separate collections of businesses, assets and liabilities attributed to them, neither group is a separate legal entity and therefore cannot own assets, issue securities or enter into legally binding agreements. Holders of tracking shares have no direct claim to the group’s assets and are not represented by separate boards of directors. Instead, holders of tracking shares are shareholders of the parent corporation, with a single board of directors, and are subject to all of the risks and liabilities of the parent corporation. We and our subsidiaries each continue to be responsible for our respective liabilities. Holders of Liberty Global Shares, LiLAC Shares and any other of our capital shares designated as ordinary shares from time to time will continue to be subject to risks associated with an investment in our company as a whole, even if a holder does not own both Liberty Global Shares and LiLAC Shares.

The LiLAC Group comprises our businesses, assets and liabilities in Latin America and the Caribbean and has attributed to it (1) VTR Finance B.V. (VTR Finance) and its subsidiaries, which include VTR, (2) Lila Chile Holding B.V., which is the parent entity of VTR Finance, (3) LiLAC Holdings Inc. (LiLAC Holdings) and its subsidiaries, which include Liberty Puerto Rico, (4) LGE Coral Holdco Limited and its subsidiary and (5) prior to July 1, 2015, the costs associated with certain corporate employees of Liberty Global that are exclusively focused on the management of the LiLAC Group (the LiLAC Corporate Costs). Effective July 1, 2015, these corporate employees were transferred to LiLAC Holdings. The Liberty Global Group comprises our businesses, assets and liabilities not attributed to the LiLAC Group, including Virgin Media, Ziggo Group Holding, Unitymedia, Telenet and UPC Holding, including our direct-to-home satellite (DTH) operations based in Luxembourg, our corporate entities (excluding the LiLAC Corporate Costs) and certain other less significant entities.

Unless otherwise indicated, convenience translations into United States (U.S.) dollars are calculated as of December 31, 2015, and operational data, including subscriber statistics and ownership percentages, are as of December 31, 2015.



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Recent Developments
Pending Acquisition of Cable & Wireless Communications
On November 16, 2015, we announced, pursuant to Rule 2.7 of the U.K. City Code on Takeovers and Mergers, the terms of a recommended acquisition of Cable & Wireless Communications Plc (CWC) for shares of Liberty Global in a scheme of arrangement. CWC offers integrated telecommunications-based services in over 40 countries located primarily in Latin America and the Caribbean. Under the terms of the transaction, CWC shareholders will be entitled to receive up to, in the aggregate: 31,651,616 Liberty Global Class A ordinary shares, 77,488,978 Liberty Global Class C ordinary shares, 3,648,524 LiLAC Class A ordinary shares and 8,939,328 LiLAC Class C ordinary shares. Further, CWC shareholders would be entitled to receive a special dividend in the amount of £0.03 ($0.04) per CWC share at the closing of the transaction, which would be in lieu of any previously announced CWC dividend. We expect that the dividend and estimated fees and expenses will be funded from CWC liquidity, including incremental debt borrowings and LiLAC Group liquidity. Completion of the acquisition, which is expected to occur during the second quarter of 2016, is subject to, among other conditions, Liberty Global and CWC shareholder approvals, certain regulatory approvals and court sanction of the scheme of arrangement. In connection with the proposed acquisition, we entered into an agreement with CWC to, among other things, provide our reasonable co-operation to CWC to complete the acquisition. If the acquisition of CWC is not completed as expected, under certain limited circumstances, we could be required to pay CWC a termination fee of $50 million.

Following completion of the acquisition of CWC, we intend to attribute CWC to the LiLAC Group, with the Liberty Global Group being granted an inter-group interest in the LiLAC Group. Based on the fully-diluted numbers of Liberty Global Shares, LiLAC Shares and CWC shares outstanding on November 16, 2015, after giving effect to the acquisition and such attribution, and treating Liberty Global Group’s inter-group interest in the LiLAC Group as being represented by additional LiLAC Shares, Liberty Global Group shareholders would have had an approximate 67.4% ownership interest in the LiLAC Group.

Acquisition of BASE

On February 11, 2016, pursuant to a definitive agreement and following regulatory approval, Telenet acquired BASE Company N.V. (BASE) for a purchase price of €1,324.4 million ($1,500.5 million at the transaction date). BASE is the third-largest mobile network operator in Belgium. We expect that this acquisition will provide Telenet with cost-effective long-term mobile access to effectively compete for future growth opportunities in the Belgian mobile market. Telenet financed the acquisition of BASE through a combination of €1.0 billion ($1.1 billion) of new debt facilities and existing liquidity. On February 4, 2016, the European Commission approved Telenet’s acquisition of BASE following Telenet’s agreement to divest both the JIM Mobile prepaid customer base and BASE’s 50% stake in Viking Co NV to MEDIALAAN NV, which was announced in November 2015.

Choice Acquisition
On June 3, 2015, pursuant to a stock purchase agreement with the parent of Puerto Rico Cable Acquisition Company Inc., dba Choice Cable TV (Choice) and following regulatory approval, one of our subsidiaries, together with investment funds affiliated with Searchlight Capital Partners, L.P. (collectively, Searchlight), acquired 100% of Choice (the Choice Acquisition). Choice is a cable and broadband services provider in Puerto Rico. We acquired Choice in order to achieve certain financial, operational and strategic benefits through the integration of Choice with Liberty Puerto Rico. The combined business is 60%-owned by our company and 40%-owned by Searchlight.
For additional information on the Choice Acquisition, including related financings, see notes 4 and 10 to our consolidated financial statements included in Part II of this Annual Report on Form 10-K. In addition, during 2015, we completed various other smaller acquisitions and dispositions in the normal course of business.

Financings
Virgin Media Refinancings. On March 30, 2015, Virgin Media Secured Finance PLC, a wholly-owned subsidiary of Virgin Media (Virgin Media Secured Finance), issued (1) $500.0 million principal amount of 5.25% senior secured notes due January 15, 2026 and (2) £525.0 million ($773.5 million) principal amount of 4.875% senior secured notes due January 15, 2027. On April 30, 2015, Virgin Media Secured Finance issued $500.0 million principal amount of 5.25% senior secured notes due January 15, 2026, which were issued at 101% of par. The net proceeds from the foregoing senior secured notes were used to (a) redeem 10% of the principal amount of certain series of notes issued by Virgin Media Secured Finance in accordance with the indentures governing each of the notes and (b) prepay in full the outstanding principal amount of certain term loans under the senior secured credit facility of Virgin Media Investment Holdings Limited, a subsidiary of Virgin Media.

I-4



2015 Reorganization Transactions. During the first quarter of 2015, we undertook the financing transactions described below in connection with certain internal reorganizations of our broadband and wireless communications businesses in Europe, (1) a controlling interest in UPC Broadband Ireland Ltd. and its subsidiaries was transferred from a subsidiary of UPC Holding to a subsidiary of Virgin Media (the UPC Ireland Transfer), with the remaining noncontrolling interest transferred to another subsidiary of Liberty Global outside the UPC Holding borrowing group and (2) Ziggo Services B.V. and its subsidiaries were transferred from a subsidiary of UPC Holding to Ziggo Group Holding (the Ziggo Services Transfer). UPC Holding used the cash consideration received in connection with the Ziggo Services Transfer and the UPC Ireland Transfer of over $2.0 billion to prepay in full the outstanding principal amount of certain notes, together with accrued and unpaid interest and the related prepayment premium, as applicable, under the UPC Broadband Holding Bank Facility and to redeem in full certain senior notes. Then certain UPCB Finance entities, which are special purpose financing entities that are wholly-owned by a Dutch foundation, used the proceeds from the forgoing prepayments to redeem in full or in part the outstanding principal amount of their respective senior secured notes.
Ziggo Refinancing. Ziggo Bond Finance B.V. (Ziggo Bond Finance) and Ziggo Secured Finance B.V. (Ziggo Secured Finance) are special purpose financing entities that are wholly-owned by a Dutch foundation. On January 29, 2015, Ziggo Bond Finance issued (1) $400.0 million aggregate principal amount of senior notes and (2) €400.0 million ($434.6 million) aggregate principal amount of senior notes, the proceeds of which were used to fund Ziggo Group Holding’s credit facilities senior proceeds loans in the aggregate principal amount of $400.0 million and €400.0 million ($434.6 million), respectively, with a subsidiary of Ziggo Group Holding. On February 4, 2015, Ziggo Secured Finance issued €800.0 million ($869.3 million) aggregate principal amount of senior secured notes and used such proceeds to fund €800.0 million ($869.3 million) aggregate principal amount of a senior secured proceeds loan with a subsidiary of Ziggo Group Holding as borrower. The proceeds from each of the foregoing loans were ultimately used to redeem certain amounts outstanding under the notes described below under “UPCB Finance Refinancing” of this section.
UPCB Finance Refinancing. UPCB Finance entities are special purpose financing entities that are wholly-owned by a Dutch foundation. During 2015, UPCB Finance IV Limited issued (1) $800.0 million aggregate principal amount of 5.375% senior secured notes (2) €600.0 million ($652.0 million) aggregate principal amount of senior secured notes and (3) an additional $340.0 million principal amount of 5.375% senior secured notes, the proceeds of which were used to fund UPC Facilities AL, AK and AL2, respectively. UPC Facility AL2 was subsequently merged with UPC Facility AL. The net proceeds from UPC Facility AL and UPC Facility AK were used to (1) prepay the remaining €190.0 million ($206.5 million) outstanding principal amount of UPC Facility Y, together with accrued and unpaid interest and the related prepayment premium, (2) prepay the $1.0 billion outstanding principal amount of UPC Facility Z, together with accrued and unpaid interest and the related prepayment premium, (3) prepay in full the then outstanding €600.0 million ($652.0 million) amount under UPC Facility AI and (4) prepay 10% of the outstanding principal amount of each of UPC Facility AC and UPC Facility AD, each together with accrued and unpaid interest and the related prepayment premium. The UPCB Finance entities that received the forgoing prepayments used the proceeds therefrom to redeem in full or in part the outstanding principal amount of their respective senior secured notes.
For a further description of the terms of the above financings and certain other transactions affecting our consolidated debt in 2015, see note 10 to our consolidated financial statements included in Part II of this Annual Report on Form 10-K.
Equity Transactions
Share Repurchases. Pursuant to our share repurchase program, during 2015, we repurchased a total of 49,984,562 Liberty Global Class C ordinary shares and Old Liberty Global Class C ordinary shares at a weighted average price of $46.91 per share, for an aggregate cash purchase price of $2,344.5 million, including direct acquisition costs and the effects of derivative instruments. The timing of the repurchase of shares pursuant to this program is dependent on a variety of factors, including market conditions. As of December 31, 2015, the remaining amount authorized for share repurchases was $1,601.1 million. Subsequent to December 31, 2015, our board of directors increased this amount to $4.0 billion. 
For a further description of our share repurchases, see note 12 to our consolidated financial statements included in Part II of this Annual Report on Form 10-K.
* * * *
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

I-5



Results of Operations and Item 7A. Quantitative and Qualitative Disclosures About Market Risk may contain forward-looking statements, including statements regarding our business, product, foreign currency and finance strategies in 2016, our property and equipment additions in 2016 and beyond, subscriber growth and retention rates, competitive, regulatory and economic factors, the timing and impacts of proposed transactions, the maturity of our markets, the anticipated impacts of new legislation (or changes to existing rules and regulations), anticipated changes in our revenue, costs or growth rates, our liquidity, credit risks, foreign currency risks, target leverage levels, our future projected contractual commitments and cash flows and other information and statements that are not historical fact. 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;
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 conditions imposed in connection with the acquisition of Ziggo N.V. (Ziggo) on our operations in the Netherlands;
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 have acquired, such as Ziggo, Choice and BASE, or may acquire, such as CWC;
changes in laws or treaties relating to taxation, or the interpretation thereof, in the U.K., U.S. or in other countries in which we operate;

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changes in laws and government regulations that may impact the availability and cost of capital and the derivative instruments that hedge certain of our financial risks;
the ability of suppliers and vendors (including our third-party wireless network providers under our mobile virtual network operator (MVNO) arrangements) to timely deliver quality products, equipment, software, services and access;
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, including the costs and benefits associated with the planned Network Extensions (defined below under Narrative Description of Business—Business Description—Overview;
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;
the 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;
our equity capital structure; 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.
The broadband distribution and mobile service 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 18 to our consolidated financial statements included in Part II of this Annual Report on Form 10-K.

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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 by expanding our services to include mobile in most of our markets. 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, Ziggo, Unitymedia, Telenet, UPC Cablecom, UPC, VTR and in Puerto Rico, Liberty. In 2016, we will use solely the UPC brand in Switzerland, discontinuing the UPC Cablecom brand. In terms of video subscribers, we operate the largest cable network in each of Austria, Belgium, Chile, the Czech Republic, Hungary, Ireland, the Netherlands, Poland, Puerto Rico, Slovakia, Switzerland and the U.K. and the second largest cable network in each of Germany and Romania.
During 2015, we launched a comprehensive plan, which we call the Liberty 3.0 program, to drive our top-line growth while maintaining tight cost controls. The Liberty 3.0 program seeks to capitalize on revenue opportunities associated with Network Extensions (as defined below), mobile and business services, together with the realization of greater efficiencies by leveraging our scale more effectively. Underpinning this program is a commitment to customer centricity, which we believe is key to succeeding in an ever more demanding consumer market. We expect the transformation to occur over the next several years and, as with any program of this magnitude, the benefits are expected to materialize over time. “Network Extensions” refers to network extension programs pursuant to which we will connect additional homes and businesses to our broadband communications network in the U.K., Central and Eastern Europe, Germany, Chile and certain other markets. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview.



I-8



The following table presents certain operating data as of December 31, 2015, 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, 2015
 
 
 
Homes
Passed
(1)
 
Two-way
Homes
Passed
(2)
 
Customer
Relationships
(3)
 
Total
RGUs
(4)
 
Video
 
 
 
 
Basic Video Subscribers
(5)
 
Enhanced Video
Subscribers
(6)
 
DTH
Subscribers
(7)
 
MMDS
Subscribers
(8)
 
Total
Video
 
Internet Subscribers
(9)
 
Fixed-line Telephony Subscribers
(10)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liberty Global Group:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
United Kingdom
 
12,908,500

 
12,891,300

 
5,115,200

 
12,732,400

 

 
3,727,000

 

 

 
3,727,000

 
4,694,900

 
4,310,500

Germany
 
12,763,800

 
12,556,500

 
7,144,700

 
12,518,700

 
5,003,800

 
1,497,100

 

 

 
6,500,900

 
3,106,200

 
2,911,600

The Netherlands (11)
 
7,023,200

 
7,009,100

 
4,090,400

 
9,728,200

 
768,000

 
3,320,500

 

 

 
4,088,500

 
3,101,400

 
2,538,300

Belgium
 
2,935,700

 
2,935,700

 
2,177,500

 
4,846,300

 
340,600

 
1,714,200

 

 

 
2,054,800

 
1,570,500

 
1,221,000

Switzerland (11)
 
2,195,100

 
2,194,600

 
1,351,400

 
2,567,200

 
619,600

 
682,700

 

 

 
1,302,300

 
759,900

 
505,000

Austria
 
1,372,300

 
1,372,300

 
654,600

 
1,378,600

 
139,200

 
363,300

 

 

 
502,500

 
484,800

 
391,300

Ireland
 
856,500

 
772,000

 
497,400

 
1,094,800

 
32,100

 
311,200

 

 
22,200

 
365,500

 
371,200

 
358,100

Total Western Europe
 
40,055,100

 
39,731,500

 
21,031,200

 
44,866,200

 
6,903,300

 
11,616,000

 

 
22,200

 
18,541,500

 
14,088,900

 
12,235,800

Poland
 
2,971,300

 
2,903,000

 
1,441,600

 
2,847,700

 
240,700

 
962,200

 

 

 
1,202,900

 
1,052,400

 
592,400

Hungary
 
1,624,100

 
1,606,800

 
1,094,500

 
2,061,100

 
170,100

 
478,600

 
289,400

 

 
938,100

 
588,200

 
534,800

Romania
 
2,647,600

 
2,579,800

 
1,243,300

 
2,127,500

 
290,600

 
593,200

 
350,600

 

 
1,234,400

 
488,800

 
404,300

Czech Republic
 
1,421,800

 
1,388,500

 
720,300

 
1,206,600

 
107,300

 
361,400

 
120,100

 

 
588,800

 
456,500

 
161,300

Slovakia
 
540,000

 
517,500

 
276,700

 
442,900

 
36,500

 
144,100

 
69,300

 
500

 
250,400

 
123,500

 
69,000

Total Central and Eastern Europe
 
9,204,800

 
8,995,600

 
4,776,400

 
8,685,800

 
845,200

 
2,539,500

 
829,400

 
500

 
4,214,600

 
2,709,400

 
1,761,800

Total Liberty Global Group
 
49,259,900

 
48,727,100

 
25,807,600

 
53,552,000

 
7,748,500

 
14,155,500

 
829,400

 
22,700

 
22,756,100

 
16,798,300

 
13,997,600

LiLAC Group:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chile
 
3,061,500

 
2,545,100

 
1,263,400

 
2,719,000

 
93,800

 
932,200

 

 

 
1,026,000

 
1,003,100

 
689,900

Puerto Rico
 
1,070,700

 
1,070,700

 
400,900

 
776,900

 

 
263,900

 

 

 
263,900

 
319,000

 
194,000

Total LiLAC Group
 
4,132,200

 
3,615,800

 
1,664,300

 
3,495,900

 
93,800

 
1,196,100

 

 

 
1,289,900

 
1,322,100

 
883,900

Grand Total
 
53,392,100

 
52,342,900

 
27,471,900

 
57,047,900

 
7,842,300

 
15,351,600

 
829,400

 
22,700

 
24,046,000

 
18,120,400

 
14,881,500


I-9



___________________
(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-only customers from Customer Relationships.
(4)
Revenue Generating Unit or RGU is separately a Basic Video Subscriber, Enhanced Video 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 market subscribed to our enhanced video service, fixed-line telephony service and broadband internet service, the customer would constitute three RGUs. Total RGUs is the sum of Basic Video, Enhanced Video, 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, 2015 RGU counts exclude our separately reported postpaid and prepaid mobile subscribers.
(5)
Basic Video Subscriber is a home, residential multiple dwelling unit or commercial unit that receives our video service over our broadband network either via an analog video signal or via a digital video signal without subscribing to any recurring monthly service that requires the use of encryption-enabling technology. Encryption-enabling technology includes smart cards, or other integrated or virtual technologies that we use to provide our enhanced service offerings. With the exception of RGUs that we count on an EBU basis, we count RGUs on a unique premises basis. In other words, a subscriber with multiple outlets in one premises is counted as one RGU and a subscriber with two homes and a subscription to our video service at each home is counted as two RGUs. In Europe, we have approximately 133,800 “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)
Enhanced Video Subscriber is a home, residential multiple dwelling unit or commercial unit that receives our video service over our broadband network or through a partner network via a digital video signal while subscribing to any recurring monthly service that requires the use of encryption-enabling technology. Enhanced Video Subscribers that are not counted on an EBU basis are counted on a unique premises basis. For example, a subscriber with one or more set-top boxes that receives our video service in one premises is generally counted as just one subscriber. An Enhanced Video Subscriber is not counted as a Basic Video Subscriber. As we migrate customers from basic to enhanced video services, we report a decrease in our Basic Video Subscribers equal to the increase in our Enhanced Video Subscribers. Subscribers to enhanced video services provided by our operations in Switzerland and the Netherlands over partner networks receive basic video 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 53,000 digital subscriber line (DSL) subscribers within Austria 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 Basic and Enhanced Video Subscribers without an incremental recurring fee. Our Internet Subscribers in Switzerland include 100,000 subscribers who have requested and received this service.
(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 41,300 subscribers within Austria that are not serviced over our networks. In Switzerland,

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we offer a basic phone service to our Basic and Enhanced Video Subscribers without an incremental recurring fee. Our Telephony Subscribers in Switzerland include 57,200 subscribers who have requested and received this service.
(11)
Pursuant to service agreements, Switzerland and, to a much lesser extent, the Netherlands offer enhanced video, 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, 2015, Switzerland’s partner networks account for 139,500 Customer Relationships, 284,400 RGUs, 104,400 Enhanced Video Subscribers, 106,600 Internet Subscribers and 73,400 Fixed-line Telephony Subscribers.
Additional General Notes to Table:
Most 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 and residential multiple dwelling units 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.


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Residential Services

Video. Our cable operations offer a full range of video services, including basic and premium programming, an electronic programming guide, high definition (HD) channels, HD receivers, digital video recorders (DVR) and HD DVRs. These services can be viewed on the television and, in most markets, through internet connected devices in the home and whenever there is internet connectivity. In certain markets, our advanced service offerings include video-on-demand (VoD) and advanced next generation set-top boxes like the multimedia home gateway “Horizon TV” or the “TiVo” service offered by Virgin Media in the U.K. or the “Digital TV” service with a Horizon-like user interface offered by Telenet in Belgium. These services, together with DVR and HD DVR functionality, give our customers the ability to control when they watch their programming. In several of our markets, we have enhanced pay-per-view programming on channels we distribute and through VoD. Several of our operations offer television applications (apps) that allow access to programming on a variety of devices, including laptops, smart phones and tablets through our online product, “Horizon Go”.
Subscribers access our enhanced video service by renting a set-top box from our operators, or purchasing one and obtaining a conditional access security card, or a “smart card”, from our operators, or without a set-top box if a subscriber is only using our basic video service. Neither a set-top box nor a smart card is required to receive basic digital television channels in our unencrypted footprints. In some of our markets, instead of a set-top box, a subscriber may use a common interface plus (CI+) module in combination with a smart card to access our enhanced video services. A CI+ module is a small device (credit card size) that allows customers with a CI+ enabled television set, who subscribe to, or otherwise have access to, our enhanced video service, to view such services without a set-top box. No set-top box, smart card or CI+ module is, however, required to receive our unencrypted basic digital services. Accordingly, subscribers with the necessary equipment and who pay a monthly subscription fee for our analog package are able to also receive our basic digital services. In addition, expanded channel packages and premium channels and services are available for an incremental monthly fee in all of our markets.
Our cable operations offer multiple tiers of digital video programming and audio services starting with a basic video service. Subscribers to our basic video service pay a fixed monthly fee and generally receive at least 60 digital or analog video channels (including a limited number of HD channels) and several digital and analog radio channels. This service also includes VoD access and an electronic programming guide. In our markets where our basic digital service is unencrypted, the cost of our digital service is the same cost as the monthly fee of our analog service. In the markets where we encrypt our basic digital service, our digital service is generally offered at an incremental cost equal to or slightly higher than the monthly fee for our basic analog service. We tailor our 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. We also offer a variety of premium channel packages to meet the special interests of our subscribers.
For an additional monthly charge, a subscriber may upgrade to one of our extended digital tier services and receive an increased number of video and radio channels, including the channels in the basic tier service and additional HD channels. Digital subscribers may also subscribe to one or more packages of premium channels for an additional monthly charge. For subscribers who want access to thousands of movies and TV series, we offer subscription VoD services, including our subscription VoD service “MyPrime”. MyPrime is available for an additional fee with our basic video services and is included in our enhanced video services with our Horizon TV platform (described below). MyPrime offers customers unlimited streaming access to a library of on-demand content both through our set-top boxes and through the Horizon Go platform. Each library has been tailored to the specific market based on available content, consumer preferences and competitive offers. Generally, a library consists of approximately 20% movies, 55% TV episodes and 25% children episodes. The content is from local and international suppliers, such as ABC/Disney, A+E Networks, NBC/Universal, CBS/Paramount, BBC, Warner TV and Sony.
In the Netherlands, Germany, Switzerland, Ireland, Poland and the Czech Republic, a subscriber to our enhanced video services also has the option for an incremental monthly charge to upgrade the standard digital set-top box to a Horizon TV box (which has HD DVR capabilities and other additional features). These boxes may be rented from us. In all our operations, except Romania and Slovakia, VoD services, including catch-up TV, are available on a subscription basis or a transaction basis, depending on the tier of enhanced video service selected by the subscriber. Customers who subscribe to an extended digital tier generally receive a VoD enabled set-top box without an additional monthly charge. The subscription-based VoD service includes various programming, such as music, kids, documentaries, adult, sports or series and a limited amount of 3D programming.

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In addition to our digital video services, we offer limited analog services in all of our broadband markets, except in the U.K., Switzerland and Puerto Rico. Subscribers to our analog video service typically receive 21 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 Ireland and Slovakia, we offer a limited number of video channels through MMDS. 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.
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.
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 UPC Holding 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 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.
Interactive Services. To enhance our customers video experience, we offer Horizon TV in the Netherlands, Germany, Switzerland, Ireland, Poland and the Czech Republic. Horizon TV is a next generation multimedia home gateway decoder box based on a digital television-platform that is capable of distributing video, voice and data content throughout the home and to multiple devices. It has a sophisticated user interface that enables customers to view and share, across multiple devices, linear channels, VoD programming and personal media content and to pause, replay and record programming. The Horizon TV platform can act as an internet router that allows access through the gateway box to the digital video content available on the television via other devices, such as laptops, smart phones and tablets. It also integrates access to personal media content, such as photos, music and movies stored in the home network.
For our multimedia gateway customers, we also offer various features and functionalities. 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. In 2015, we launched our new “Replay TV” service in the Netherlands and Ireland and expanded this service in Switzerland. This service allows our customers to go back seven days in the electronic programming guide to “replay” linear programming they have missed. Using the Horizon Go app, customers can watch programs from the past seven days on their laptops, smart phones or tablets. Replay TV is also available to our Digital TV customers in Belgium. We expect to expand the availability of Replay TV to additional markets during 2016.
For our Horizon TV subscribers, we offer apps for various online services (such as YouTube, Picasa and others). The Horizon family of products also includes an online television app for viewing on a second screen called Horizon Go that allows video customers to view linear channels, with many channels available outside of the home. Horizon Go also offers access to VoD and, for Horizon TV customers, when in the home, the second screen devices also act as a remote control. Subscription VoD, such as MyPrime and, in Germany, Maxdome, is also available via the Horizon Go service. We also have available through Horizon Go the ability to remotely schedule the recording of a television program on the Horizon TV box at home through an iOS or Android mobile digital device or an internet web browser.
At December 31, 2015, we had 1,759,000 Horizon TV subscribers, excluding 174,000 subscribers in the Czech Republic where we have upgraded their set-top box to provide Horizon TV services. The Horizon TV cloud platform allows users to stream experiences to set-top boxes. This cloud-based Horizon TV platform is available in the Czech Republic and in Poland. Digital video experiences are offered by us through the TiVo platform in the U.K. under a strategic partnership agreement with TiVo Inc. The TiVo boxes provide converged television and broadband internet capabilities. The digital platform, Digital TV, is also available to our enhanced video subscribers in Belgium, which has been upgraded with a new Horizon-like user interface and improved functionalities. At December 31, 2015, we had 2,897,000 TiVo subscribers and 1,714,000 subscribers to Telenet’s Digital TV.
In addition, we offer our regular interactive DVR and, as described above, MyPrime. Where the Horizon TV platform service is not available, MyPrime is offered as a premium channel for non-Horizon TV subscribers. We have launched MyPrime in the Netherlands, Switzerland, Ireland, Poland, Hungary, the Czech Republic and Slovakia.
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 500 Mbps in Switzerland, Hungary, Romania and Slovakia. In general, our most economically priced tier has download speeds of either 100 Mbps or 150 Mbps. Our ultra high-speed internet service is based primarily

I-13



on Euro DOCSIS 3.0 technology, which is an international standard that defines the requirements for data transmission over a cable system. Euro DOCSIS can deliver speeds of up to 1 Gbps. We are currently testing Euro DOCSIS 3.1 and expect to begin commercial deployment of that system in late 2016.
Our internet service generally includes email, address book and parental controls. We also offer value-added broadband services through certain of our operations for an incremental charge. These services include security (e.g., anti-virus, anti-spyware, firewall and spam protection) and online storage solutions and web spaces. In certain of our markets, we offer mobile broadband services as described under —Mobile 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, such as Horizon TV. In certain of our markets, we are deploying a community WiFi via routers in the home (the Community WiFi), which provides a secure access to the internet for our customers. Community WiFi is enabled by a cable modem WiFi access point (WiFi modem) in the set-top box or the Horizon TV box of our internet customers. The Community WiFi is created through the sharing of access to the public channel of our customers’ home wireless routers. The public channel is a separate network from the secure private network used by the customer within the home and is automatically enabled when the WiFi modem is installed. Access is free for our internet customers.
At December 31, 2015, we had almost 6.1 million WiFi access points in our European footprint and we plan to increase our WiFi access points to over 10.0 million in 2016. In the U.K., Virgin Media’s customers have access to an extensive network of public WiFi access points, including in the London underground train stations. Public WiFi access points are also available to Unitymedia customers in Germany and Telenet customers in Belgium. We plan to expand our Community WiFi service in 2016. Our Community WiFi is branded as “Wi-Free” in Austria, Belgium, Switzerland, Ireland, Czech Republic, Poland, Hungry and Romania and as “WifiSpots” in the Netherlands. Through an agreement with Comcast Corporation, in 2016 our internet customers will also have access to millions of WiFi access points in the U.S. and across various European countries for no additional costs.
We have introduced a next generation WiFi and telephony gateway in the U.K., Germany, Belgium, Switzerland and Romania. This gateway includes both a data modem and a WiFi router and will permit download speed of up to 1 Gpbs across our existing Euro DOCSIS 3.0 platform and is expected to support Euro DOCSIS 3.1. It has an automatic WiFi optimization function, which selects the best possible wireless frequency at any given time. This gateway can be self-installed and allows customers to customize their home WiFi service. It will be introduced in the rest of our operations in 2016. By using the WiFi modems, the Horizon TV box and the new gateway, the Community WiFi does not affect the internet speeds of our customers.
In the Netherlands and Romania, a subscriber must subscribe to our video service (or the video service in a partner network) in order to subscribe to our internet service. In our other markets, our broadband internet service is available on a standalone 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, 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 and Hungary, we also provide traditional circuit-switched fixed-line telephony services. We pay interconnection fees to other telephony and internet 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.
Our fixed-line telephony service may be selected in several of our markets on a standalone basis and in all of our markets 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 value added services, such as a personal call manager, unified messaging and a second or third phone line at an incremental cost. In some of our markets, we offer a phone app that allows our fixed-line telephony customers with smart phones to use their fixed-line call packages.
Mobile. We offer mobile services, both data and voice, as an MVNO over third-party networks in the U.K., Germany, the Netherlands, Belgium, Switzerland, Austria, Ireland, Hungary and Chile. In Poland, we have a small legacy MVNO service that we maintain for those subscribers. In the Netherlands, Switzerland and Chile, our mobile services are provided

I-14



through LTE wireless systems. We plan to add MVNO arrangements in certain of our other broadband communication markets. The Netherlands, Belgium, Switzerland, Austria, Ireland, Hungary and Chile provide their mobile telephony services as full MVNOs through partnerships with a third-party mobile network operator in their respective footprints. All of these operations lease the third party’s radio access network and own the core network, including switching, backbone, interconnections, etc. For certain portions of our mobile customer base in the Netherlands, we outsource the core network to a third party. These arrangements permit us to offer our customers in these markets all mobile services without having to build and operate a cellular radio tower network. Following the February 2016 acquisition of BASE, Telenet became a network provider in Belgium and plans to migrate its current and future mobile subscribers to the BASE network after termination of its MVNO agreement at the end of 2017.
In the U.K. and Germany, 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, Switzerland, Austria, Ireland, Hungary and Chile. In the Netherlands and Germany, we offer our mobile service to our customers located within our footprints who subscribe to at least one of our other products: video, broadband internet or fixed-line telephony. At December 31, 2015, we had approximately 4.8 million mobile subscribers.
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. We offer our customers the option to purchase mobile handsets and, in the U.K., Belgium and Switzerland, make such purchase pursuant to a contract independent of their mobile services contract. Where the new WiFi gateway described above is available, telephony customers can use a special phone app to take and make calls anywhere at home rates. Versions of this app have been available to our customers in the U.K., the Netherlands, Belgium, Switzerland and Ireland for some time.
We typically charge a one-time activation fee to our customers for each subscriber identification module (SIM) card. Our mobile services typically include voice, short message service (or SMS) and internet access. Calls, both within and out of network, incur a charge or are covered under a postpaid monthly service plan. Our mobile services are primarily on a postpaid basis with customers subscribing to services for periods ranging from activation for a SIM-only contract to up to 24 months, with the latter often taken with a subsidized mobile handset. In Belgium, however, our postpaid service is offered without a minimum contract term. In the U.K., we also offer a prepaid service, where the customers pay in advance for a pre-determined amount of airtime or data and generally have no minimum contract term. In almost all of our markets, subscribers to a double-or triple-play bundle receive a discount on their mobile service fee.
Business Services
In addition to our residential services, we offer a range of voice, broadband internet, data, video, wireless and cloud services to business customers and public sector organizations. These services differ from residential services in several fundamental ways, such as bandwidth, service levels, billing, security services and the blending of public and private network features. Our business customers include SOHO (generally up to five employees), small business and medium and large enterprises, as well as on a wholesale basis to other operators. Our business services are designed to meet the specific demands of our business customers with a wide range of services, including increased data transmission speeds and virtual private networks. These services fall into five broad categories: (1) VoIP and circuit-switch telephony, hosted private branch exchange solutions and conferencing options, (2) data services for internet access, virtual private networks Ethernet transport and high capacity point-to-point services, (3) video programming packages and select channel lineups for targeted industries, (4) wireless services for mobile voice and data, as well as WiFi networks and (5) value added services, including webhosting, managed security systems and storage and cloud enabled software.
Our business services are provided to customers at contractually established prices based on the size of the business, type of services received and the volume and duration of the service agreement. SOHO and small business customers pay business market prices on a monthly subscription basis to receive enhanced service levels and business features that support their needs. For more advanced business services, these customers generally enter into a service agreement. For medium to large 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, certain of our operations also have agreements to provide these services to our business customers over dedicated fiber lines and third party fiber networks.

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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 national and regional fiber networks, which are connected to the home over the last few hundred meters by coaxial cable. Approximately 98% 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 a single 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 closely monitor our network capacity and customer usage. Where necessary, we increase our capacity incrementally, for instance by splitting nodes in our network. We also continue to explore new technologies that will enhance our customer’s connected entertainment experience, such as:
recapturing bandwidth and optimizing our networks by:
increasing the number of nodes in our markets and using digital compression technologies;
increasing the bandwidth of our hybrid fiber coaxial cable network to 1 GHz;
converting analog channels;
bonding additional Euro DOCSIS 3.0 channels; and
using digital compression technologies;
increasing the efficiency of our networks by moving headend functions (encoding, transcoding and multiplexing) to the cloud;
enhancing our network to accommodate business services;
using wireless technologies to extend our services outside the home;
offering remote access to our video services through laptops, smart phones and tablets; and
expanding the availability of Horizon TV and related products and developing and introducing online media sharing and streaming or cloud based video.
In addition, we are expanding our hybrid fiber coaxial cable network into new market areas. For example, beginning in 2015, we commenced a Network Extension program in the U.K. and we plan to pursue similar opportunities in Germany, Central and Eastern Europe and Chile. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview.
We are also testing Euro DOCSIS 3.1 and expect to begin commercial deployment of that system in late 2016.
We deliver our high-speed data and fixed-line telephony over 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 content providers and third-party rights holders, including broadcasters and cable programming networks. For such licenses, we generally pay a monthly fee on a per channel or per subscriber basis, with minimum pay guarantees in certain cases. 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 through our apps for smart phones and tablets.
We purchase each type of customer premises equipment from a number of different suppliers with at least two or more suppliers for our high-volume products. Customer premises 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. For our mobile services, we are dependent on the

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MVNO arrangements we have entered into with third-party wireless network providers that offers mobile services to carry our mobile communications traffic. Each of our operations offering mobile services has an agreement with a provider for its customers. In each case, we seek to enter into medium to long-term arrangements for these 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 seek 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, 2015, with respect to the cable systems of our consolidated subsidiaries attributed to the Liberty Global Group and the LiLAC Group. 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, 2015
 
U.K.
 
Germany
 
The Netherlands
 
Belgium
 
Switzerland
 
Austria
 
Ireland
 
Poland
 
Hungary
 
Czech Republic
 
Romania
 
Slovakia
 
Chile
 
Puerto Rico
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liberty Global Network Data:
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Two-way homes passed (HP) percentage (1)
100
 
98
 
100
 
100
 
100
 
100
 
90
 
98
 
99
 
98
 
97
 
96
 
83
 
100
Digital video availability percentage (2)
100
 
   100(9)
 
100
 
100
 
   100(9)
 
95
 
97
 
98
 
98
 
98
 
97
 
90
 
83
 
100
Broadband internet availability percentage (2)
100
 
   98(9)
 
100
 
100
 
   100(9)
 
95
 
90
 
98
 
99
 
98
 
97
 
88
 
83
 
100
Fixed-line telephony availability percentage (2)
100
 
   98(9)
 
100
 
100
 
   100(9)
 
95
 
89
 
98
 
99
 
98
 
96
 
88
 
83
 
100
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bandwidth percentage (3):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
at least 860 MHz
13
 
98
 
100
 
21
 
100
 
86
 
57
 
99
 
26
 
99
 
96
 
97
 
77
 
34
750 MHz to 859 MHz
76
 
--
 
--
 
--
 
--
 
--
 
34
 
   --(10)
 
53
 
   --(10)
 
--
 
--
 
10
 
33
less than 750 MHz
11
 
2
 
--
 
79
 
--
 
14
 
8
 
   --(10)
 
20
 
1
 
4
 
3
 
13
 
33
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liberty Global Product Penetration:
 
 

 

 
 
 

 

 

 
 
 
 
 
 
 

 

 
 
 
 
Cable television penetration (4)
29
 
51
 
58
 
70
 
59
 
37
 
40
 
40
 
40
 
33
 
33
 
33
 
34
 
25
Enhanced Video penetration (5)
100
 
23
 
81
 
83
 
52
 
72
 
91
 
80
 
74
 
77
 
67
 
80
 
91
 
100
HD, DVR & HD DVR penetration (6)
91
 
68
 
44
 
97
 
89
 
85
 
90
 
97
 
44
 
65
 
32
 
49
 
61
 
66
Broadband internet penetration (7)
36
 
25
 
44
 
53
 
35
 
35
 
48
 
36
 
37
 
33
 
19
 
24
 
39
 
30
Fixed telephony penetration (7)
33
 
23
 
36
 
42
 
23
 
29
 
46
 
20
 
33
 
12
 
16
 
13
 
27
 
18
 
 
 

 

 
 
 

 

 

 
 
 
 
 
 
 

 

 
 
 
 
Double-play penetration (8)
19
 
10
 
17
 
22
 
19
 
16
 
29
 
25
 
12
 
40
 
13
 
13
 
24
 
18
Triple-play penetration (8)
65
 
33
 
61
 
50
 
36
 
47
 
46
 
36
 
38
 
14
 
29
 
23
 
46
 
38

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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 (Basic Video or Enhanced Video).
(5)
Percentage of cable television subscribers (Basic Video and Enhanced Video Subscribers) that are Enhanced Video Subscribers.
(6)
Percentage of Enhanced Video 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-line 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, 2015. Percentages are rounded to the nearest whole number.

Video, Broadband Internet & Fixed-Line Telephony and Mobile Services
at December 31, 2015
 
 
U.K.
 
Germany
 
The Netherlands
 
Belgium
 
Switzerland
 
Austria
 
Ireland
 
Poland
 
Hungary
 
Czech Republic
 
Romania
 
Slovakia
 
Chile
 
Puerto Rico
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Video services (excluding DTH):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Next Generation Video (1) (in 000’s)
 
2,897
 
460
 
706
 
1,714
 
295
 
 
 
149
 
128
 
 
 
20
 
 
 
 
 
 
 
 
Multiscreen Access (2)
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
 
 
 
Number of out-of-home channels available
 
134
 
88
 
95
 
86
 
178
 
 
 
77
 
81
 
63
 
80
 
 
 
 
 
 
 
 
Replay TV
 
 
 
 
 
X
 
X
 
X
 
 
 
X
 
 
 
 
 
 
 
 
 
 
 
 
 
 
VoD
 
X
 
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
Number of channels in basic digital tier
 
61
 
88
 
74
 
75
 
90
 
107
 
63
 
103
 
92
 
104
 
115
 
109
 
86
 
103
Number of channels in basic analog tier (3)
 
n/a
 
29
 
30
 
21
 
n/a
 
30
 
26
 
32 or 42(9)
 
28
 
41
 
41
 
45
 
67
 
n/a
Number of unique channels in basic digital tier (4)
 
61
 
59
 
44
 
54
 
90
 
72
 
37
 
61 or 71(9)
 
58
 
85
 
74
 
64
 
19
 
103
    Number of HD channels
 
49
 
78 or 79(6)
 
55
 
15
 
130
 
55
 
41
 
78
 
25
 
44
 
39
 
31
 
62
 
103
Broadband internet service:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum download speed offered (Mbps)
 
200
 
200(7)
 
200(7)
 
200(7)
 
500
 
250
 
240
 
250(10)
 
500
 
300
 
500
 
500
 
120
 
200
Percentage of Two-way Homes Passed with 3.0 speeds of at least 100 Mbps
 
100
 
100
 
100
 
100
 
100
 
100
 
98
 
100
 
93
 
100
 
100
 
100
 
100
 
100
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed-line telephony and mobile services:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
VoIP Fixed-line
 
(8) 
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
Number of Mobile (MVNO) SIM cards (in 000’s)(5)
 
3,016
 
356
 
187
 
1,001
 
33
 
13
 
8
 
7(11)
 
34
 
 
 
 
 
 
 
132
 
 

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___________________
(1)
Available on the Horizon TV platform, except in the U.K. where these services are available through the TiVo platform and in Belgium where these services are available through the Digital TV platform.
(2)
Via Horizon Go platform, except TV Anywhere in the U.K. and the Yelo Play app in Belgium.
(3)
Excludes the lifeline tier.
(4)
Excludes the channels that are also included in basic analog tier.
(5)
Represents the number of active SIM cards in service.
(6)
Depending on whether the subscriber is located in Baden-Württemberg, North Rhine-Westphalia or Hesse.

(7)
Speeds of up to 250 Mbps, 500 Mbps and 240 Mbps are available to business customers in Germany, the Netherlands and Belgium, respectively.

(8)
Available to business customers only.

(9)
Depending on location.

(10)
Speeds of up to 600 Mbps available in limited areas.

(11)
Limited to legacy subscribers.

Operations—Liberty Global Group
Provided below is country-specific information with respect to the broadband communications and DTH services of our subsidiaries attributed to the Liberty Global Group.
Virgin Media. Virgin Media operates a cable network in the U.K. and Ireland under the Virgin Media brand. Virgin Media also operates an MMDS network in Ireland, the license for which will expire in April 2016. Virgin Media’s video services include a broad range of digital interactive services, including VoD, and a range of premium subscription-based and pay-per-view services. 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 and in five regional clusters in Ireland, including the capital city of Dublin and other major cities. Virgin Media also offers quadruple-play services that include mobile voice and data services as an MVNO through an arrangement with mobile communications providers. In addition, Virgin Media offers its customers access to an extensive network of public WiFi hotspots, including in the London underground train (or Tube) stations in the U.K.
U.K. As a complement to its broadband services, Virgin Media-U.K. offers a comprehensive internet streaming video service, Virgin TV Anywhere, that allows its video customers to stream up to 117 real-time video channels and watch VoD content anywhere in the U.K. where they have a broadband connection. The streaming service is available at no additional cost to Virgin Media-U.K.’s digital video customers. In addition, Virgin Media-U.K. offers the multimedia home gateway TiVo to its digital video customers. Customers can record up to three programs simultaneously when watching an existing recording. TiVo customers can also access real-time television channels, manage their TiVo box with a laptop, smart phone or tablet and have access to cloud storage for personal data. Virgin Media-U.K. also offers a TiVo app for the Netflix video service that allows up to five individual profiles on a single account. At December 31, 2015, Virgin Media had 2.9 million connected TiVo customers. Virgin Media-U.K. does not offer an analog video service.
Virgin Media-U.K. offers its subscribers premium digital channels from Sky plc (Sky) through an agreement with Sky and premium BT Sport channels through an agreement with BT Group plc (BT). Virgin Media-U.K. subscribers may receive these channels through a smart card on Virgin Media-U.K.’s network as part of Virgin Media-U.K.’s services or separately for an incremental subscription fee. In addition, Virgin Media-U.K. subscribers using TiVo may access internet programming services and a Eurosport app pursuant to agreements between Virgin Media and such service providers.
Through its twisted copper network, Virgin Media-U.K. offers fixed-line telephony services to its residential customers. Virgin Media’s telephony services via VoIP are only available to its business customers.

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Ireland. To complement its digital offering in Ireland , Virgin Media-Ireland offers its digital subscribers several premium channels (sports, movies, adult, ethnic and kids). Virgin Media-Ireland’s services include Horizon TV and, at December 31, 2015, it had 149,500 connected Horizon TV subscribers. It also offers the on-line streaming service Horizon Go and the video service MyPrime, which Virgin Media-Ireland launched in March 2015. MyPrime is available to Horizon TV customers for no additional charge. In late 2015, Virgin Media-Ireland launched its mobile services as an MVNO and it launched Replay TV.
Unitymedia. Unitymedia’s operations in Germany 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 offers triple-play services consisting of video, internet and fixed-line telephony services in nearly all of its footprint. Unitymedia also offers quadruple-play services that include mobile voice and data services as an MVNO through an arrangement with a mobile communications provider. Unitymedia customers have access to an extensive network of public WiFi hotspots.
For its video cable customers, Unitymedia offers Horizon TV, an HD receiver and a CI+ module. At December 31, 2015, Unitymedia had almost 460,000 connected Horizon TV subscribers. No set-top box, CI+ module or smart card is, however, required to receive basic digital services because Unitymedia’s basic digital service is unencrypted in its German footprint. In addition, Horizon Go is available, giving subscribers access to over 100 linear channels of which over 80 channels, plus subscription VoD programming, may be accessed outside the home. Unitymedia also offers the subscription VoD service Maxdome, which is available via the internet on the television or on mobile devices via the Horizon Go app. In addition to its premium video offerings, through an agreement with Sky Deutschland AG, a subsidiary of Sky (Sky Deutschland), Unitymedia offers its subscribers premium video channels from Sky Deutschland. Unitymedia subscribers may receive Sky Deutschland channels for an incremental subscription fee through a smart card on the Unitymedia network.
Approximately two-thirds of Unitymedia’s video customers are in multiple dwelling units where Unitymedia 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 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 at volume-based discounts and will generally resell them to housing associations with whom the operator maintains the customer relationship. Unitymedia has entered into agreements with Professional Operators, such as Tele Columbus Multimedia GmbH, that allow Unitymedia to market its digital video, broadband internet and fixed-line telephony services directly to the Professional Operator’s subscriber base.
Unitymedia 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 purchases a portion of the electricity required for the operation of its networks through Deutsche Telekom under such agreements. Unitymedia’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. For information on a legal action that Unitymedia commenced against Deutsche Telekom in December 2012 regarding these agreements, see note 17 to our consolidated financial statements included in Part II of this Annual Report on Form 10-K.
Ziggo. Ziggo’s operations in the Netherlands are located throughout most of the Netherlands and include the major cities of Amsterdam, Rotterdam, The Hague, Utrecht and Maastricht. Ziggo offers video, internet, fixed-line telephony and mobile services as an MVNO.
Digital subscribers may subscribe to premium channels, including HBO, Film1, Ziggo Sport Totaal (includes six sport channels), Fox Sports International and the premium football league channel, Fox Sports Eredivisie, alone or in combination, for additional monthly charges. VoD services, including catch-up television, are available on a subscription or a transaction basis, depending on location and the tier of digital service selected by the subscriber. VoD services are also available to CI+ users. A subscription-based VoD service is included in the extended digital tier for no additional charge. The transaction VoD service includes over 3,000 titles of on-demand content.
Horizon TV and its products are available to customers as are apps on the gateway device that provide access to various internet services, such as YouTube and Facebook. At December 31, 2015, Ziggo had over 700,000 connected Horizon TV subscribers. Ziggo offers its customers a cloud-based interactive television service using existing set-top boxes. By combining IP protocol with the standard set-top box, devices without built-in hardware functionality for interactivity can

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make use of interactive services through the Ziggo cable network. Also available is a CI+ module that enables subscribers to Ziggo’s digital video service to view such service without a set-top box and use a single remote control. To utilize this service, Ziggo customers must have a CI+ enabled television and obtain the CI+ module and smart card from Ziggo. In 2015, Ziggo launched its Ziggo Sport channel, which is available exclusively to Ziggo customers.
Belgium. The Telenet operations in Belgium attributed to the Liberty Global Group are conducted under the Telenet brand. At December 31, 2015, we owned 56.9% 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, 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, sports (including non-exclusive broadcasting rights for the domestic football league), documentary, foreign language, kids, music, adult and movies. Telenet’s enhanced video customers get access to Yelo Play. Yelo Play allows Telenet’s enhanced video customers to remotely manage their DVR, view programs remotely (up to seven days after the original broadcast) and access VoD with a laptop, smart phone or tablet in the home and out of the home. At December 31, 2015, approximately 26% of its enhanced video customers were actively using Yelo Play. 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 its footprint. Telenet has nearly 1.3 million access points to the Community WiFi as of December 31, 2015, including approximately 2,000 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.
Telenet has a direct customer relationship with the basic and enhanced 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 Telenet).
UPC CHAT. UPC CHAT operates a cable network in Switzerland and cable and DSL networks in Austria under the UPC Cablecom (until spring 2016) and UPC brands (collectively, UPC CHAT). The DSL services are provided over an unbundled loop or, in certain cases, over a shared access network, and available in the majority of Austria wherever the incumbent telecommunications operator has implemented DSL technology. UPC CHAT’s operations are located in 24 of the 26 member states (Cantons) of Switzerland, including major cities such as Bern, Zürich, Lausanne and Geneva, and in regional clusters in Austria encompassing the capital city of Vienna, the regional capitals of Graz, Innsbruck and Klagenfurt, two smaller cities and the Vorarlberg region. Three of the cities in Austria (Vienna, Wr. Neustadt and Baden), directly or indirectly, own 5% of the local operating subsidiary of UPC CHAT serving the applicable city.
UPC CHAT offers mobile voice and data services as an MVNO. UPC CHAT no longer offers analog service in Switzerland; however, customers in Austria with the necessary equipment and who subscribe to UPC CHAT’s analog service are also able to access its basic digital service, which is unencrypted in the Austria. A CI+ module or set-top box in combination with a smart card is, however, required to view any of UPC CHAT’s encrypted digital packages with the customer paying the incremental charge over the digital entry tier’s applicable rate.
Switzerland. UPC CHAT’s basic video service in Switzerland is available in any one of three languages (French, German or Italian). It offers the basic video service as a triple-play package consisting of video, broadband internet and fixed-line telephony services, plus an app to use the fixed-line telephony service on a smart phone. UPC CHAT offers Horizon TV and its family of products and, at December 31, 2015, it had 295,000 connected subscribers. UPC CHAT also offers apps that allow its subscribers to remotely manage a DVR, view linear channels, replay a linear channel without recording it and access VoD with a laptop, smart phone or tablet anywhere a broadband or WiFi connection is available. In each of its digital cable packages in Switzerland, UPC CHAT includes the functionality for transaction-based VoD service (depending on location), including catch-up television, pay-per-view services and HD channels. Fully integrated in the VoD service is the video library MyPrime. MyPrime is included in the extended digital tiers for no additional charge.

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For two-thirds of its video subscribers in Switzerland, UPC CHAT 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 CHAT offers digital video, broadband internet and fixed-line telephony services directly to the video cable subscribers of those partner networks that enter into service operating contracts with UPC CHAT. UPC CHAT has the direct customer billing relationship with these subscribers. By permitting UPC CHAT to offer some or all of its digital video, broadband internet and fixed-line telephony products directly to those partner network subscribers, UPC CHAT’s service operating contracts have expanded the addressable markets for UPC CHAT’s digital products. In exchange for the right to provide digital products directly to the partner network subscribers, UPC CHAT pays to the partner network a share of the revenue generated from those subscribers. UPC CHAT also provides network maintenance services and engineering and construction services to its partner networks.
Austria. UPC CHAT’s video service (digital and analog) in Austria 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. In addition, through an agreement with Sky Deutschland, UPC CHAT offers its digital subscribers in Austria a number of premium channels, including HD channels, from Sky Deutschland. UPC CHAT offers its broadband internet service over cable and over DSL. In 2016, UPC CHAT plans to expand its services in Austria to include the subscription VoD service MyPrime.
Central and Eastern Europe. UPC CHAT also operates cable networks under the UPC brand 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 smart phones as a television remote control. Except in Slovakia where its basic digital service in encrypted, customers with the necessary equipment and who have a monthly subscription to the analog service are also able to access the basic digital service, which is unencrypted. The Liberty Global Group also has attributed to it DTH operations in most of these countries, which is provided through UPC DTH. Community WiFi is available in each of these countries, except Slovakia, with approximately1.6 million access points in Central and Eastern Europe.
PolandUPC Poland’s operations are located in regional clusters encompassing nine of the 10 largest cities in Poland, including the capital city of Warsaw and the cities of Cracow and Katowice. UPC Poland offers a catch-up television service and Horizon Go. UPC Poland launched Horizon TV using the RDK cloud-based system in select areas in November 2014 with a full commercial launch in January 2015. At December 31, 2015, it had over 128,000 connected Horizon TV subscribers. The video service MyPrime became available to video subscribers in December 2014 and at December 31, 2015, had over 145,000 subscribers. UPC Poland offers a lifeline tier and basic tier of digital programming, as well as extended tiers and premium packages.
Hungary. UPC Hungary’s operations are available to over 40% of the households in Hungary, including households located in the capital city of Budapest. In each of its digital cable packages, UPC Hungary includes the functionality for transaction-based VoD services. UPC Hungary offers to its subscribers apps for various online services (such as YouTube, Picasa, Flickr and others). 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. It also offers the video service MyPrime and the online streaming service HBO Go. HBO Go is available at no additional charge to UPC Hungary customers who subscribe to the HBO 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. Over 80% of the subscribers to UPC Czech’s digital video service receive such service through a set-top box with HD or HD DVR functionality. For its video cable customers, UPC Czech offers Horizon TV through the RDK cloud-based system and the online video service Horizon Go. At December 31, 2015, UPC Czech had 20,000 connected Horizon TV subscribers, plus an additional 174,000 subscribers with Horizon TV access via upgraded set-top boxes. MyPrime is included in the Horizon TV offer. Approximately 47% of UPC Czech’s digital cable 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 and includes a lifeline tier of services.
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

I-24



Cluj-Napoca, Timisoara, Iasi and Constanta. UPC Romania’s video service includes Romanian terrestrial broadcast channels, selected European satellite programming and other programming. In November 2014, UPC Romania launched the online video service Horizon Go. 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 almost all of the Slovakian terrestrial, cable and local channels available, selected European satellite and other programming, and audio channels. The online streaming service HBO Go is available to HBO channel subscribers. In July 2015, UPC Slovakia launched Horizon Go and in November 2015 MyPrime became available via Horizon Go. 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.
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 almost 830,000 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 25 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 2015, UPC DTH launched its first triple play offer in Hungary. Through a third-party network, UPC DTH subscribers in Hungary may also receive broadband internet with in-home WiFi and telephony services in addition to their DTH service. In the Czech Republic and Slovakia, UPC DTH offers CI+ module, which enables its subscribers in these countries to receive its signals without a set-top box. DVRs are also available. In 2014, UPC DTH added HBO Go for its HBO customers in Hungary, Czech Republic and Slovakia. For no additional charge, such customers may access their HBO channels anytime, anywhere on multiple devices.
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 20% of our total video subscribers in the Czech Republic, 31% of our total video subscribers in Hungary, 28% of our total video subscribers in Slovakia and, through FocusSat, 28% 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. UPC DTH offers both standard definition (SD) and HD services to all of its customers in Hungary, the Czech Republic, Slovakia and, through FocusSat, in Romania.
Operations—LiLAC Group
Our operations attributed to the LiLAC Group are currently located in Chile and Puerto Rico, where we offer a variety of broadband services over our cable distribution systems, plus mobile services in Chile. Our broadband distribution business and mobile services in Chile are conducted through our wholly-owned subsidiary VTR. Our broadband telecommunications service in Puerto Rico is conducted through our indirect 60%-owned subsidiary Liberty Puerto Rico.
VTR. VTR offers triple-play services consisting of video, broadband internet and fixed-line telephony services in 34 communities within Santiago and 42 communities outside Santiago, including Chile’s largest cities, such as Iquique, Antofagasta, Concepción, Viña del Mar, Valparaiso and Rancagua, and smaller cities across Chile. VTR obtains programming from the United States, Europe, Argentina and Mexico. VTR also carries domestic Chilean cable programming, which includes local events such as football (soccer) matches and regional content.
VTR offers a full range of digital video services, including basic and premium packages. All digital video services are encrypted and require a set-top box provided by VTR. In addition, 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, international and adult channels. VoD services, including catch-up television, are available on a subscription or a transaction basis, depending on location. VoD services include over 3,900 titles of on-demand content, including multi-screen features. VTR plans to launch Horizon TV through an advanced, cloud-based platform in 2016. VTR’s analog service is offered only in areas where its digital service is not available.
VTR offers its broadband internet services in 34 communities within Santiago and 42 communities outside Santiago. In its highest tier of service, VTR offers high-speed internet service with download speeds of up to 160 Mbps from February 2016. VTR also offers multi-feature telephony service over its cable network to customers in 34 communities within

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Santiago and 42 communities outside Santiago via either circuit-switched telephony or VoIP, depending on location. VTR offers mobile voice and data services as a full MVNO pursuant to an arrangement with a third-party mobile telecommunications provider. Through this arrangement, in 2015, VTR became the first emergent MVNO in Chile to have LTE services in all its voice and data plans.
Liberty Puerto Rico. Liberty Puerto Rico offers only digital broadband services and provides these services in the San Juan metropolitan area and numerous other municipalities covering over 80% 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. Liberty Puerto Rico is exploring the addition of MVNO arrangements to its product line-up and other features of mobility to its service. For example, its Community WiFi is available to its customers in Plaza Las Americas, a major shopping center in San Juan.
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 is based on information from the subscription based website DataXis for the third quarter of 2015. 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:
traditional FTA broadcast television services;
DTH satellite service providers;
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 DSL 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, the next generation of ultra high-speed mobile data, also called “4G” (referred to herein as LTE) services;
over-the-top video content aggregators utilizing our or our competitors’ high-speed internet connections;
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;
other cable operators in the same communities that we serve;
satellite master antenna television systems, commonly known as “SMATVs”, which generally serve condominiums, apartment and office complexes and residential developments;
MMDS operators; and
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, without impairing our high speed internet service 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 costs given that business demand peaks at a time when consumer demand is low, and peaks at lower levels than consumer demand. In response to the continued growth in over-the-top viewing, we have launched a number of innovative video services, including Horizon Go, MyPrime and Replay TV.
Liberty Global Group
In the European countries in which we operate, over 90% of the households have a television. 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, Poland, 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. In addition, in Belgium we expect we will experience competition on own network as a result of the Belgian Regulatory Authorities granting third-party operators (including the incumbent telephony operator) access to cable operators’ networks. See Regulatory Matters—Europe—Belgium. Mobile broadband has gained a noticeable share of subscribers, and competition from SMATV or MMDS could also be a factor. In addition, over-the-top viewing is a competitive factor. Overall, we are experiencing more and more convergence as customers are increasingly looking to receive all their media and communication services from one provider at attractive prices. As a result, our ability to offer triple-play or quadruple-play bundles is a key marketing concept to continue to attract and retain customers.
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 IPTV over DSL, VDSL and FTTx networks and in some cases DTH and DTT. 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 competitive pressure on our operations, including the pricing and bundling of our video products. The providers of DTH satellite services, particularly in our markets in the U.K., Germany and Central and Eastern European, are also significant competitors. In addition, over-the-top video aggregators are 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. Typically these services are available on multiple devices and in and out of the home. With consumers’ desire to view content when and where it suits them, the ability to meet such demand through our TV everywhere products is key to our competitive position.
Our ability to continue to attract and retain customers depends on our continued ability to acquire appealing content and services on acceptable terms and to have such content available on multiple devices and outside the home. Some competitors, such as Swisscom AG (Swisscom) in Switzerland, have obtained long-term exclusive contracts for certain sports 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 Austria and Sky in the U.K. and 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 in the Czech Republic, Romania, Slovakia, Hungary, the Netherlands and Switzerland. Based on research of various telecommunication publications, including by the Organization for Economic Cooperation and Development (OECD) and internal estimates, our cable networks in several of our operations have been overbuilt by FTTx networks as follows: Ziggo--30%, UPC CHAT-Switzerland--36%, UPC Czech--65%, UPC Hungary--13%, UPC Romania--92% and UPC Slovakia--74%. Although we have extensive FTTx overbuild in Switzerland, connectivity to the FTTx 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. Vectoring is a

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transmission method that coordinates line signals to reduce crosstalk levels and improve performance. Bonding is a method of taking channels on either DSL or cable plant and bond those channels together for a higher bandwidth throughput.
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 and Hungary and to a lesser extent in Romania and Slovakia. Based on research of various telecommunication publications, including the OECD and internal estimates, approximately 49% and 51% of our operations in Poland and Hungary, respectively, are overbuilt by other cable providers. Also, approximately 10% in each of our footprints in Romania and Slovakia is overbuilt by other cable providers.
In most of our Central and Eastern European markets, we also face intense competition from DTH services. In addition to overbuilding portions of our cable network in Hungary and Romania, Digi TV, the DTH platform of RCS & RDS S.A. (Digi TV), a Romanian cable, telephony and internet service provider, is targeting our analog cable and DTH customers with aggressively-priced DTH packages. In the Czech Republic and Slovakia, “SkyLink”, the brand name of M7 Group SA, a European provider of DTH services, is a DTH competitor providing aggressively-priced packages of video content. The incumbent telecommunications operator, Telekom Romania Communications S.A., 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, 5% for the Czech Republic, 4% 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 digital services, such as DVR functionality, HD, VoD, catch-up television, Replay TV, multiscreen services and multi-media gateways. We seek to compete by accelerating the migration of our customers from analog to digital services, using such advanced digital features and offering attractive content packages and bundles of services at reasonable prices. 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. In addition, from time to time, digital channel offerings are modified by our operations to improve the quality of our programming. In all of our operations, we use the triple-play bundle as a means of driving video, as well as other products where convenience and price can be leveraged across the portfolio of services. In several of our markets, we have expanded our services 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, we launched our next generation multimedia home gateway Horizon TV to meet our customers desire to view programming anytime and anywhere. We continue to update Horizon TV with new applications and expand its availability in our markets, including the recent launch of a cloud-based Horizon TV platform in the Czech Republic.
Virgin Media-U.K. Virgin Media-U.K. is the sole provider of video cable services in substantially all of its network area and, in terms of the number of video cable customers, the largest cable television provider in the U.K. Virgin Media’s video cable services are available to approximately 48% of the U.K. television households and it serves 14% of the total U.K. television market. Virgin Media-U.K.’s digital television services compete primarily with those of Sky, which is the primary pay satellite television platform in the U.K. Sky has approximately 10.2 million subscribers in the U.K., or 38% of the total television market. Other significant competitors are BT and TalkTalk Telecom Group plc (TalkTalk), each of which offer IPTV services in the U.K. BT (which is acquiring Everything Everywhere Limited (EE), a British mobile network provider, in early 2016), and Sky have also launched next-generation set-top boxes and compete with Virgin Media-U.K. for consumers seeking bundled services.
Sky owns the U.K. rights to various entertainment, sports and movie programming content and channels. Sky is both a principal competitor in the pay-television market and an important supplier of content to us. Various Sky channels, including Sky Sports, are available over Sky’s satellite system and our cable networks, as well as via Sky’s apps and online players and other television platforms, and some of the channels are available on BT and TalkTalk platforms. Virgin Media-U.K. distributes several basic and premium video channels supplied by Sky. BT is also both a principal competitor and an important supplier of content to us. BT owns premium BT Sport channels, providing a range of sports content, including football (soccer) from the English Premier League and exclusive rights to the UEFA Champions League and the UEFA Europa League. The BT Sport channels are available over BT’s IPTV platform, via BT’s apps and online players, Sky’s satellite system and our cable network. In addition, FTA DTT and internet-connected television services are a competitive factor. For example, Netflix, Amazon Prime, Google and Apple have all launched over-the-top products in the U.K.
In this competitive market, Virgin Media-U.K. is expanding its broadband network and, in 2015, realigned its triple-play bundles and upgraded TiVo set-top boxes to include storage and display of personal photos, videos and music and catch-

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up services. It also offers Virgin TV Anywhere, which allows its video subscribers to stream linear channels and access certain VoD content anywhere with WiFi connectivity. In addition, Virgin Media-U.K.’s ability to include mobile for a low incremental fee creating a quadruple-play bundle is a key market offer.
Virgin Media-Ireland. Virgin Media-Ireland is the sole provider of video cable services in Ireland. Virgin Media-Ireland’s video cable service is available to over half of the television households in Ireland and it serves 23% of the total television market. Virgin Media-Ireland’s primary competition for video customers is also from Sky, which provides DTH satellite services to 41% of the television households in Ireland. Sky offers competitively priced triple-play services and promotional discounts for new customers. Virgin Media-Ireland also faces competition from Eircom Limited (Eir), which also offers triple-play services, as well as an IPTV video service, and smaller video providers, including providers using FTTx networks. To enhance its competitive position, Virgin Media-Ireland offers Horizon TV, MyPrime and Replay TV and, at the start of 2016, increased its download internet speed to 360 Mbps for its mass market double- and triple-play bundles.
Unitymedia. Unitymedia is 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’s video cable services are available to approximately 33% of the television households in Germany and it serves 17% of the total television market. Unitymedia’s primary competition is from FTA television received via satellite. Unitymedia’s primary competitor for pay TV services is the IPTV services over VDSL and FTTx and DTH of the incumbent telecommunications operator, Deutsche Telekom. Deutsche Telekom has over 2.6 million video subscribers in Germany, or 7% of the total television market, for primarily its IPTV services and has announced plans to cover approximately 80% of German homes with its VDSL network by 2018. We estimate Deutsche Telekom will have overbuilt nearly our entire network with VDSL by the end of 2016. Within parts of its VDSL footprint, Deutsche Telekom started to implement vectoring technology, enhancing maximum broadband speeds to up to 100 Mbps from the current speeds of up to 50 Mbps. Deutsche Telekom further announced its ambition to have implemented super vectoring technology across all cable network areas by 2018, enhancing broadband speeds in these areas to up to 250 Mbps.
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 through Deutsche Telekom’s DSL network under a resell agreement making it a significant competitor in the double-play and triple-play market in our footprint. Both of these companies have expanded their bundle offers to include mobile products. These converged offerings may enable Deutsche Telekom and Vodafone to reduce churn and attract new customers.
Deutsche Telekom and Professional Operators compete with Unitymedia for housing association contracts. Over the last few years, Deutsche Telekom has become increasingly competitive in this market. Professional Operators typically procure the broadcast signals they distribute from Unitymedia or from FTA television received via satellite. 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 competes with Sky Deutschland’s digital premium subscription service to households that receive their basic television service via FTA satellite, cable or other technologies. Over-the-top content providers are also creating competitive pressure, including the on-line video streaming services of Sky Deutschland and the services of ProSiebenSAT.1 Media AG’s Maxdome, Netflix and Amazon Prime. In addition, there is a risk of competition for video services from commercial broadcasters and other content providers that currently pay Unitymedia 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 offers Horizon TV and the Horizon family of products, including Horizon Go. To attract customers to its double- and triple-play bundles, Unitymedia has realigned its promotional offers. It also makes mobile available creating converged bundles. Mobile customers receive a discount when they also subscribe to certain bundles.
Ziggo. Ziggo is the largest cable television provider in the Netherlands based on the number of video cable subscribers. Ziggo’s video cable services are available to approximately 92% of the television households in the Netherlands and it serves 54% of the total television market. Ziggo experiences most of its competition in the Netherlands from other fixed-line telecommunications carriers and broadband providers, including the incumbent telecommunications operator Koninklijke KPN N.V. (KPN). KPN offers (a) IPTV over FTTx networks, (b) IPTV through broadband internet connections using DSL or VDSL or an enhancement to VDSL called “vectoring”, (c) DTT and (d) LTE services. KPN provides subscription video services to 29% of the total television households in the Netherlands. Its ability to offer bundled triple-play of video, broadband internet and telephony services and a quadruple-play with mobile services, places

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significant competitive pressure on Ziggo’s operations. KPN’s VDSL service includes VoD and DVR functionality, catch-up television, replay television and second screen viewing. In addition, KPN has launched its own over-the-top video service. Portions of our network have also been overbuilt by KPN’s and other providers’ FTTx networks, and expansion of these networks is expected to continue. Another principal competitor in the provision of video services is from the DTH provider CanalDigitaal, a subsidiary of M7 Group S.A. CanalDigitaal, which offers DTH and DTT services, provides subscription video services to 11% of the total television households in the Netherlands.
To improve its competitive position, Ziggo introduced new portfolios for its double- and triple-play offers. For an incremental fee, customers may also include mobile voice and data to any bundle package. The bundle options give subscribers the option to select various combinations of services, including high-speed internet, fixed-line telephony options and content options, to meet their needs. Also, Ziggo’s extended digital video tiers include Horizon TV, Replay TV and MyPrime. Horizon Go is also available. In addition, Ziggo continues to improve the quality of its programming and modify its video options by offering attractive content packages. For example, in November 2015, it launched Ziggo Sport, its new exclusive sports channel, which Ziggo added to all existing video packages for no additional charge.
Telenet. Telenet is the sole provider of video cable services in its network area and the largest cable television provider in Belgium. Its video cable service is available to approximately 62% of the television households in Belgium and it serves approximately 43% of the total television market. Telenet is the largest subscription television provider in Belgium based on the number of pay video subscribers. Telenet’s principal competitor is Proximus NV/SA (formerly Belgacom NV/SA) (Proximus), the incumbent telecommunications operator, which has interactive digital television, replay television, VoD and HD service as part of its video offer, as well as a remote access service. Proximus also offers double-play and triple-play bundles and discounts on mobile services when taken with a triple-play offer. Approximately 29% of total television households in Belgium subscribe to ProximusIPTV services over its DSL and VDSL networks. 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 other providers of video services who may then be able to offer triple- and quadruple-play services as well. For more information, see Regulatory Matters—Europe—Belgium. In order to compete effectively against alternative providers, Telenet uses its Digital TV platform, 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, VoD offerings and its Play Sports channel. In addition, Telenet continues to enhance its Yelo Play app and programming, including extending its rights to the English Premier League through 2018 and the addition of other sports rights. Further, with its acquisition of BASE, Telenet will be able to expand its quad-play options for customers.
UPC CHAT-Switzerland. UPC CHAT is 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 CHAT’s video cable services are available to approximately 64% of the television households in Switzerland and it serves 39% of the total television market. Our main competitor is Swisscom, the incumbent telecommunications operator, which provides IPTV services over DSL, VDSL and FTTx networks to approximately 37% 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. Swisscom is targeting our customers with its introduction of an ultra HD set-top box in early 2016. The set-top box will support HD and ultra HD content with plans to broadcast the Super League football (soccer) in ultra HD during the 2016-17 season. It is also updating its user interface to improve its other interactive services. Swisscom’s internet speeds available in its bundled offers, include up to 100 Mbps on its VDSL network and up to either 300 Mbps or 1 Gbps in areas served by its FTTx network. Swisscom continues to aggressively expand its FTTx network to Switzerland households in our footprint, as well as in our partner network footprints. It has built its fiber-to-the-home network in several cities in cooperation with municipality-owned utility companies and, where no cooperation agreement has been reached, Swisscom is building its own fiber-to-the-home network. By the end of 2015, approximately 1.0 million homes and businesses in Switzerland have access to Swisscom’s FTTx network.
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. Over-the-top providers are, however, increasing the competitive pressure on video viewing offers. With respect to subscribers on partner networks, UPC CHAT competes with other service providers for the contracts to serve these subscribers.
To compete effectively in Switzerland, UPC CHAT promotes Horizon TV and its family of products together with replay television and MyPrime, giving subscribers the ability to personalize their programming and viewing preferences. It has

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also increased the internet speeds for all its bundle customers, including a speed of up to 500 Mbps for its top extended digital tier bundles.
UPC CHAT-Austria. In Austria, UPC CHAT is the largest cable television provider based on the number of video cable subscribers. UPC CHAT’s video cable service is available to approximately 38% of the television households in Austria and it serves 14% of the total television market. UPC CHAT’s primary competition in Austria is from FTA television received via satellite and DTT services by the public broadcaster. 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. It also launched a video streaming service in 2015. To compete effectively, UPC CHAT realigned its bundle offers in 2015 and includes HD DVR in its extended digital video tiers. Horizon Go is also available and its top triple-play bundle includes internet speeds of up to 250 Mbps. To compete with over-the-top providers, including Telekom Austria, UPC CHAT is exploring offering its own video streaming service.
Central and Eastern Europe. UPC Poland is the largest cable television provider in Poland based on the number of video cable subscribers. In 2015, UPC Poland expanded its services to a number of markets, including five new cities, resulting in UPC Poland’s video cable services being available to approximately 21% of the television households in Poland. 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), as well as Orange Poland, a subsidiary of France Telecom S.A. UPC Poland also competes with the IPTV services of Orange Poland, which is expanding its DSL, VDSL and FTTx networks, including to households in UPC Poland’s footprint. UPC Poland competes with other cable operators with triple-play services, who have overbuilt portions of UPC Poland’s operations. To enhance its competitive position, UPC Poland enhanced its sports channel offerings, realigned its portfolio of services and, for its extended tiers of bundle services, increased internet speeds and added MyPrime services. It also launched the Horizon TV cloud platform throughout its footprint and Horizon Go is also available.
UPC Hungary’s video cable service is available to over 40% 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 has also overbuilt portions of UPC Hungary’s cable service areas with its own cable network. As a DTH provider, Digi TV offers more HD channels, including key sports channels, than UPC DTH. In its cable foot print, Digi TV offers a competitively priced quad-play bundle. UPC Hungary also faces competition from the IPTV services of the incumbent telecommunications company Magyar Telekom, a subsidiary of Deutsche Telekom. To meet such competition, UPC Hungary emphasizes its competitively priced bundles, which have higher broadband speeds of up to 500 Mbps with up to 120 Mbps or 240 Mbps included in its core bundle offers. Its extended digital video tiers include MyPrime and, for its HBO customers, the on-line streaming service HBO Go. For DTH customers in Hungary, UPC DTH launched a triple-play offer in November 2015. Of the television households in Hungary, 7% subscribe to Digi TV’s DTH service, 16% subscribe to Digi TV’s cable service and 26% subscribe to Magyar Telekom’s DTH or VDSL service. UPC DTH serves 8% of the television households in Hungary with its DTH service.
With the discontinuation of FTA analog services in the Czech Republic and Slovakia, DTH services have increased significantly in popularity, with SkyLink being the main provider. This company provides DTH services to approximately 27% and 31% 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 11% 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 is expanding its DTH network to cover not only Slovakia but other Central and Eastern European countries as well. In Slovakia, it serves 23% of the television households. UPC DTH provides DTH services to 3%, 5% and 3% of the television households in the Czech Republic, Romania and Slovakia, respectively. To stay competitive, UPC DTH offers prepaid DTH services in the Czech Republic, as well as a prepaid product through FocusSat in Romania. Also, FocusSat has enhanced the channel offering in Romania, including the addition of non-exclusive broadcasting rights for domestic football league. In Romania, competition also comes from DTH services offered by Telecom Romania, the incumbent telecommunications company, with 17% of the total television households.
Of the television households in the Czech Republic, Romania and Slovakia, 10%, 12% and 8%, 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, 37% in Romania and 22% in Slovakia. In addition to its DTH services in Romania, Digi TV continues to overbuild large portions of our cable network with its own cable network. Of the television households in Romania, 37% subscribe to Digi TV’s cable service. Telekom Romania is also expanding its FTTx network. Both of

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these competitors offer quad-play bundles. UPC Czech competes with the incumbent telephone company’s VDSL service and several other operators that provide DTH services and a number of local internet service providers (ISPs) that provide IPTV services over FTTx networks. Providers of IPTV services over FTTx networks can reach approximately 65% of the households passed by our cable network in the Czech Republic. One of these companies is O2 Czech Republic, which has its own sports channel with exclusive rights in Multidimension and covers Champions Leaque, Czech football (soccer) and similar sporting events. 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 HD channel offerings and, in certain markets, MyPrime, Horizon Go and expanded VoD services. In addition, all of these operations have realigned their portfolio offers to include additional HD channels. These operations have also increased broadband internet speeds in their triple-play bundles ranging from up to 300 Mbps in the Czech Republic to 500 Mbps in Hungary, Romania and Slovakia. Promotional discounts are available, particularly on bundled options. Also, CI+ cards for DTH only products are available in the Czech Republic and in Slovakia.
LiLAC Group
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. To enhance the video offerings in both Chile and Puerto Rico, we are in the process of developing cloud-based, next generation user interfaces for these operations based on advanced technologies, including Horizon TV.
VTR. In Chile, VTR is the largest cable television provider based on number of video cable subscribers. VTR’s video cable services are available to approximately 60% of the Chilean television households and it serves 20% of the total television market in Chile. VTR 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 Latin America Holdings, Inc. (DirecTV). Movistar offers double-play and triple-play packages using DTH for video and DSL for internet and fixed-line telephony and offers mobile services. 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. To a lesser extent, VTR also competes with video services offered by or over networks of fixed-line telecommunication providers using DSL technology. Of the Chilean television households, 13%, 6% and 10% subscribe to the video services of Movistar, Claro and DirecTV Chile, respectively. To effectively compete, VTR offers VoD, catch-up television, DVR functionality, premium HD channels, pay-per-view, HD receivers and a variety of premium channels as value added services that can be purchased by VTR’s video cable customers. These services and its variety of bundle options, including internet and telephony, enhance VTR’s competitive position.  In addition, in order to provide its customers greater viewing options, VTR intends to launch Horizon TV in 2016.
Liberty Puerto Rico. Liberty Puerto Rico is the largest provider of video cable services in Puerto Rico and the third largest provider of video services in Puerto Rico. Its video cable service is available to approximately 87% of the television households in Puerto Rico and it serves 22% 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 27% and 25%, respectively, of the television households in Puerto Rico. Dish Network Corporation 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 compared to Dish Network. Additionally, Claro has launched an IPTV service, but it has not yet become a significant competitive factor. In order to compete, Liberty Puerto Rico has increased the number of its HD channels, launched a Spanish language tier, improved the functionality of its electronic program guide and expanded its VoD offerings. In 2015, Liberty Puerto Rico increased its internet speeds in its bundle offers with download speeds of up to 200 Mbps in its core bundles.
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

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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 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. 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.
Our strategy is speed leadership, including increasing the maximum speed of our connections, offering varying tiers of service, prices and a variety of bundled product offerings and a range of value added services. We update our bundles and packages on an on-going basis to meet the needs of our customers, including offering download internet speeds of 120 Mbps or more at mass market price points. Ultra high-speed internet is also available in most markets, with speeds of up to 250 Mbps, with speeds of up to 500 Mbps available in Switzerland, Hungary, Romania and Slovakia. In early 2016, Virgin Media-Ireland, Unitymedia and VTR each increased their top tier speed to 360 Mbps, 400 Mbps and 160 Mbps, respectively. 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 Euro DOCSIS 3.0 technology, we can compete with local FTTx initiatives and create a competitive advantage compared to DSL infrastructures and LTE initiatives on a national level. With the expected commercial deployment of Euro DOCSIS 3.1 in late 2016, we plan to further increase our high-speed internet offers.
Liberty Global Group
Across Europe, our key competition in this product market is from the offering of broadband internet products using various DSL-based technologies 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. 
United Kingdom and Ireland. In the U.K., we have a number of significant competitors in the market for broadband internet services. Of these broadband internet providers, BT is the largest, serving 34% of the total market in the U.K. Virgin Media serves 20% of the total broadband market in the U.K. BT provides broadband internet access services over its own, VDSL network, which is available to approximately 85% of the U.K. population. BT Openreach, a division of BT, manages BT’s local access network and provides competitors access to BT’s networks. BT has announced its intention to rollout ultrafast speeds of up to 300 Mbps to 500 Mbps by the end of 2020 to up to 10.0 million premises using G-fast technology, a DSL standard designed for local loops less than 250 meters. This technology is also expected to eventually support a rollout of 1 Gbps service.
Operators such as Sky, TalkTalk and EE 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 developments, such as LTE mobile services and WiFi services, is increasing.
Virgin Media-U.K. is expanding its ultra high-speed services and increasing its download speeds to up to 200 Mbps throughout its footprint. Virgin Media-U.K. 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. Promotional discounts are available for new customers.
Mobile providers have gained market share throughout Europe. In Ireland, mobile telephony providers Vodafone Ireland, Three Ireland (a subsidiary of CK Hutchison Holding Ltd) and Meteor Mobile Communications Limited, a subsidiary of Eir, offer a range of mobile internet products at competitive prices. Outside of mobile internet, Virgin Media-Ireland’s most significant competitor is also Eir, the fixed-line incumbent, with 39% of the broadband internet market in Ireland. Eir offers download speeds of up to 100 Mbps through its expanded VDSL network, which passes approximately 1.4 million homes. In addition, as part of its bundle offers, Eir makes available download speeds of up to 1 Gbps in select markets, covering less than 2% of Irish homes, but plans to expand this service. Virgin Media’s share of total broadband internet subscribers in Ireland is 32%. To compete effectively, Virgin Media-Ireland realigned its bundles, including increasing the download speed of its internet services to up to 240 Mbps in 2015 and to up to 360 Mbps at the start of 2016. It also introduced a SIM-only mobile product in late 2015 and expects to launch LTE in 2016.
Germany. In Germany, the competition for broadband internet services is particularly intense. For broadband internet access, DSL is the dominant technology and Deutsche Telekom is the primary provider. Other major competitors to our services are resellers of Deutsche Telekom’s DSL and VDSL services, including United Internet AG and alternative network providers, such

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as Vodafone Germany and Telefónica Germany Holding AG (Telefónica Germany). Deutsche Telekom provides services to 42% of the broadband internet subscribers in Germany through its network. United Internet AG and Vodafone Germany provide DSL services to 14% and 9%, 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. Both Deutsche Telekom and Vodafone Germany are upgrading their mobile systems and increasing their coverage areas. Deutsche Telekom has started upgrading its VDSL network with vectoring technology to increase its speeds to up to 100 Mbps. It plans to have 80% of German households connected to this network by 2018. With its (vectored) VDSL expansion plan, competition from Deutsche Telekom will increase.
Unitymedia serves 10% of the total broadband internet market in Germany. To compete effectively, Unitymedia expanded its ultra high-speed internet services and increased its download speeds to up to 200 Mbps and, in February 2016, launched download speeds of up to 400 Mbps in over 40% of its footprint. These download speeds cannot be matched by DSL operators. Unitymedia offers its internet service on a standalone basis or together with fixed-line telephony at attractive rates and through bundled offerings that include digital video and fixed-line telephony. Unitymedia also offers mobile voice and data services.
The Netherlands. With high internet access penetration, competition in the Netherlands internet market is intense. We face competition primarily from KPN, one of the largest broadband internet providers, and to a lesser extent, the telecommunications company, Tele2 Netherlands Holding N.V., as well as operators using wholesale access on KPN’s fixed network. KPN offers ultra high-speed internet services with download speeds of up to 500 Mbps on its FTTx network and up to 100 Mbps over its VDSL or FTTx network. KPN is the leading mobile broadband provider with its competitively priced mobile internet products and LTE services. KPN and other competitors in both fixed-line and wireless broadband internet services offer a range of services with varying speeds, as well as interactive computer based services, data and other non-video services. KPN serves 42% and Ziggo serves 43%, respectively, of the total broadband internet market in the Netherlands. To remain competitive, Ziggo seeks to increase the maximum speed of its connections, offers varying tiers of service, prices and bundled product offerings and a range of value added services. Ziggo is also expanding its mobile data services, including access to its Community Wifi. The bundle strategies include offering ultra high-speed internet with speeds of up to 200 Mbps to compete with KPN’s VDSL and FTTx initiatives. Ziggo offers its internet service on a standalone basis or together with digital video or with digital video and fixed-line telephony as bundles. It also offers mobile voice and data services.
Belgium. 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. In Flanders, Telenet is the leading provider of residential broadband internet services. Telenet’s primary competitor is the DSL service provider Proximus. Proximus is an aggressive competitor targeting Telenet customers through quadruple-play offerings and a low-cost broadband service. Approximately 45% of Belgium’s broadband internet subscribers use ProximusDSL and VDSL service with download speeds up to 100 Mbps. Mobile internet use is increasing. Similar to its video services, Telenet will be facing competition in the provision of internet services from other providers who have access to Telenet’s cable network.To compete, Telenet promotes its high-speed internet with multiple-play bundles, offering download speeds from 30 Mbps to 200 Mbps with all new bundled broadband internet customers receiving download speeds of at least 100 Mbps. Customers also have access to Telenet’s extensive Community WiFi. Telenet provides broadband internet service to 38% of the broadband internet market in Belgium.
UPC CHAT. In Switzerland, Swisscom is the largest provider of broadband internet services, with an estimated market share of 54% 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 1 Gbps offer to customers on its new FTTx network. Swisscom’s FTTx network reaches approximately 1.0 million homes. The next significant competitor is Sunrise Communications AG with 9% of broadband internet customers. Through third-party FTTx networks, Sunrise Communications AG offers download speeds of up to 100 Mbps, as well as a 1 Gbps offer for its high-end customers. In Switzerland, UPC CHAT serves 21% of the broadband internet subscribers. It offers download speeds of up to 200 Mbps and, for its Horizon TV subscribers, up to 500 Mbps. The internet service is available either on a standalone basis or through a bundle offer. UPC CHAT seeks to distinguish itself through competitively priced bundled offerings, including digital video, fixed-line telephony services and its ultra high-speed internet services. It is also expanding its Community WiFi network in Switzerland.
In Austria, UPC CHAT’s largest competitor with respect to broadband internet services is the incumbent telecommunications company, Telekom Austria, with approximately 61% of the broadband internet subscribers in Austria. Telekom Austria is expanding its DSL network. It also plans to use G-fast technology and VDSL technology with vectoring to increase its download speeds. Currently, Telekom Austria offers download speeds of up to 30 Mbps and up to 100 Mbps in select areas. UPC CHAT’s share of such market is 20%. The mobile broadband services of Telekom Austria are also a significant competitive factor. Telekom Austria is the largest mobile broadband provider serving 41% of the mobile broadband subscribers that use LTE services. In addition, UPC CHAT faces competition in Austria from LLU and other mobile broadband operators. As a result, the competition in the

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broadband internet market is intense. Competitors in the Austrian broadband internet market are focusing on speed and pricing to attract customers. UPC CHAT uses its ultra high-speed internet services with access to Community WiFi and competitively priced bundles to encourage customers from other providers to switch to its services in Austria. It also offers promotional discounts and, in 2015, launched a portfolio of mobile voice and data services.
Central and Eastern Europe. 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, Multimedia Polska S.A. and Vectra S.A., with top download speed offers ranging from up to 100 Mbps to 500 Mbps in parts of UPC Poland’s footprint. In Hungary, the primary competitors are the incumbent telecommunications company, Magyar Telekom and Digi TV. Where Digi TV’s cable is available, its download speeds range from 100 Mbps to 1 Gbps for its top tier of service. In addition, in all of our Central and Eastern European operations we face increased competition from mobile broadband operators. Download speeds are also a competitive factor, with competitors enhancing their networks to increase their available download speeds. In this competitive environment, 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.
LiLAC Group
Chile. In Chile, VTR faces competition primarily from the non-cable-based internet service providers, such as Movistar, and from other cable-based providers, such as Claro. VTR 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. Movistar offers ultra high-speed internet services with download speeds of up to 150 Mbps over portions of its DSL network. Mobile broadband competition is significant as well. Both Movistar and Claro have launched an LTE network for high-speed mobile data. Movistar is also the leading mobile broadband provider with its competitively priced mobile internet products and LTE services. Movistar serves 40% and VTR serves 37%, respectively, of the total broadband internet market in Chile. To compete effectively, VTR is expanding its two-way coverage and offering attractive bundling with fixed-line telephony and digital video service. In response to the availability of mobile data in Chile, VTR offers its high-speed internet with download speeds of up to 120 Mbps and up to 160 Mbps in early 2016.
Puerto Rico. In Puerto Rico, Liberty Puerto Rico competes primarily with mobile broadband providers. Most of these providers, including the incumbent telecommunications company, offer these services over their LTE networks. To compete with mobile broadband, Liberty Puerto Rico offers its high-speed internet with download speeds of up to 200 Mbps. Liberty Puerto Rico also competes with the DSL services of Claro in providing fixed-line internet services.
Fixed-Line Telephony and Mobile Services
The market for fixed-line telephony services is mature. Changes in market share are driven by the combination of price and quality of services provided and the inclusion of telephony services in bundled offerings. With respect to fixed-line telephony services, our businesses 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, we compete with other VoIP operators offering service across broadband lines and with mobile telephony providers, many of whom offer LTE services and are making significant advances in obtaining customers. Over-the-top telephony is also 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 is extremely competitive due to market trends, the offering of carrier pre-select services, number portability, the replacement of fixed-line with mobile telephony and the growth of VoIP services, as well as continued deregulation of telephony markets and other regulatory action, such as general price competition. Carrier pre-select allows the end user to choose the voice services of operators other than the incumbent while using the incumbent’s network. Our telephony strategy is based on value leadership. In most of our countries we offer our telephony services as “anytime” or “any destination”. In addition, we provide product innovation, such as telephone apps that allow customers to make and receive calls from their fixed-line call packages on smart phones. We also offer varying plans to meet customer needs and use our telephony bundle options, as well as our bundle service options with our digital video and internet services, to help promote our telephony services. In addition, we offer mobile voice and data services in the U.K., Germany, the Netherlands, Belgium, Switzerland, Austria, Chile, Poland, Hungary and Ireland. With consumers increasingly moving towards mobile services, we continue to explore opportunities to offer mobile services in our other operations and mobility applications to our other services.


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Liberty Global Group
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 directly, through LLU, or indirectly. These include TalkTalk and Sky and mobile telephone operators, such as EE and Vodafone who lease access to BT’s network to operate their LTE services. In addition, we face competition from companies offering VoIP services using the customer’s existing broadband, mobile data and WiFi connections. For our mobile service in the U.K., we also face competition from these mobile network operators as well as other MVNOs. EE is the largest mobile service provider in terms of the number of mobile subscribers in the U.K. Its U.K. network reaches 98% of the U.K. population with further expansion expected in 2016. Virgin Media is responding to such competition through innovative calling plans and a WiFi application that allows customers to use their fixed-line call packages on smart phones. It offers flexible mobile service contracts that allow customers to change services monthly and has increased its WiFi access points. Virgin Media’s share of the fixed-line telephony market in the U.K. is 15%.
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. In recent years, fixed-line phone calls have been transformed into a commodity and have become increasingly dependent on a quality broadband offering, as phone is increasingly bundled with broadband internet services. Fixed-line telephony has experienced significant price erosion over the last few years, with operators increasingly offering flat-rate products. We seek to compete based on the speed of our network connections, pricing and product innovation. We also offer varying plans to meet customer needs and various bundled service options with our digital video and broadband internet services. The market share of the fixed-line telephony market for Unitymedia is 8%.
In the Netherlands, KPN is the dominant fixed-line telephony provider and expanded its mobile services with its LTE network, which is available throughout the Netherlands. All of the large multiple system operators, including Ziggo, as well as ISPs, offer VoIP services. Ziggo entered the mobile market as an MVNO in September 2013. The market share of the fixed-line telephony market for Ziggo is 38% compared to 51% for KPN. In the mobile market, Ziggo is small compared to the competition with less than 1% of the market.
In Belgium, competition in providing fixed-line residential telephony service is intense, with providers introducing substantial price reductions over the years. Proximus is the dominant fixed-line telephony provider with 63% of the fixed-line telephony market. It is also a significant competitor in the mobile telephony market, with its LTE services. Although Proximus is a significant competitor, it also provides certain services to Telenet’s customers, including number portability and connect calls by Telenet customers to Proximus customers. To gain market share, Telenet emphasizes customer service and provides innovative plans to meet the needs of its 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 its fixed-line telephony service may also make free off-peak calls to mobile lines in Belgium, Europe, the U.S. and Canada. Telenet also offers competitively priced mobile telephony that include a wealth of voice minutes, text messages and mobile data. Telenet competes with other fixed-line operators and with mobile operators, including Proximus, in the provision of telephony and mobile services in Belgium. Telenet’s share of the fixed-line telephony market in Belgium is 26%.
In Switzerland, 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. In Switzerland, we serve our subscribers with VoIP over our cable network, and in Austria, we serve our subscribers with VoIP over our cable network, circuit-switched telephony services and DSL technology service over LLU. To meet the competition for fixed-line services in Switzerland, UPC CHAT enhanced its portfolio with attractive bundle options as well as standalone plans with free minutes either nationally or internationally and offers mobile services, including a phone app that allows smart phone users make calls on their fixed network plan. The market share of the fixed-line telephony market for UPC CHAT in Switzerland is 12%.

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In our other 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. Given the increased relevance of the mobile market, we recently launched mobile services as an MVNO in Austria and Hungary and plan to expand our MVNO services to our other markets. 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.
LiLAC Group
In Chile, VTR 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 offers circuit-switched and VoIP telephony services over its cable network. VTR’s share of the residential and commercial fixed-line telephony market in Chile is 20%.
In Chile, over 60% of telecommunications consumers use a mobile service, prompting us in 2012 to add wireless plans to our services. Claro, Movistar and Entel PCS Telecommunications SA are the primary companies that offer mobile telephony in Chile. Competition in the Chilean mobile services market is intense. As an MVNO, VTR offers its mobile telephony services on a standalone basis. To attract and retain customers, VTR focuses on its fixed-line telephony customer base, offering them postpaid accounts at an attractive price. In mid-2015, WOM S.A. entered the mobile services market through its acquisition of the Nextel Chile network. WOM S.A. is exerting significant competitive pressure in the mobile market with its very aggressive and attractive price offer. Such pricing is driving down sales and increasing churn in the mobile market. The mobile services of VTR represent less than 1% of the mobile telephony market in Chile, of which approximately 91% are postpaid accounts. Of these customers 78% subscribe to at least one fixed-line VTR service.
Regulatory Matters
Overview
Video distribution, broadband internet, fixed-line telephony and mobile 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.
Liberty Global Group
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 implementation at the national level. 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. Regulation in Switzerland, which is not a Member State of the EU and is not part of the European Economic Area, 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.

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EU Communications Regulation
The body of EU law that deals with communications regulation consists of a variety of legal instruments and policies (collectively, 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 regulations that have direct effect without any specific adoption at the national level.
The Regulatory Framework primarily seeks open communications services markets within Europe. It harmonizes the rules within the EU 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.
On December 18, 2009, the Official Journal of the EU published revisions to the Regulatory Framework. These revisions should have been transposed into the laws of the Member States before May 25, 2011, although in practice, this process is still ongoing in certain Member States. Despite their limited nature, certain changes to the Regulatory Framework will affect us. For example, some new powers 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. Additionally, the revisions to the Regulatory Framework grant enhanced powers to 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 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. The EU Commission has currently recommended that there be four such predefined markets, which is subject to periodic review. NRAs might, however, continue to maintain their analysis of some of the markets from the previous 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.
NRAs might seek to define us as having Significant Market Power in any of these 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, regardless of whether it is a market predefined by the EU Commission or an additional market defined by an NRA. We have been found to have Significant Market Power in certain markets in which we operate and further findings of Significant Market Power are possible. In particular, we have been found to have Significant Market Power in the termination of calls on our network.
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 on certain operators under their jurisdiction reasonable must carry obligations for the transmission of specified radio and television broadcast channels. Such obligations are required to be based on clearly defined general interest objectives, proportionate and transparent and subject to periodic

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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, the EU Commission has taken very limited steps to enforce EU law in this area, leaving must carry obligations intact in certain Member States that are in excess of what we believe to be allowed, and we do not expect the EU Commission or the Member States to curtail such obligations in the foreseeable future.
Net Neutrality/Traffic Management. In October 2015, the European Parliament adopted the Regulation on the first EU-wide net neutrality regime. The Regulation, which is directly applicable in all Member States beginning on April 30, 2016, permits the provision of specialized services, optimized for specific content, and subjects operators to reasonable traffic management requirements. The Regulation also abolishes roaming tariffs beginning in June 2017 and provides for a transitional period beginning in April 2016. We expect that the Body of European Regulators for Electronic Communications (BEREC) will issue guidelines in the second half of 2016.
On May 6, 2015, the EU Commission published its Digital Single Market strategy document. The strategy is an aggregation of many different policy areas with the purpose of creating a digital single market to expand jobs and stimulate growth. The strategy includes policy review in the areas of EU communications regulation, broadcasting law, copyright reform and anti-competitive geo-blocking practices.

The first legislative proposal under the strategy was adopted in December 2015 with publication of a proposed Regulation to address the portability of online audiovisual content services. Under the proposal, providers of online audiovisual content services must allow subscribers who are temporarily present in any EU Member State to access and use those services. The intention of the proposed Regulation is for subscribers to be able to enjoy the same out-of-home service in another Member State. Political negotiations on the draft Regulation will take place during 2016, and we expect the Regulation to be adopted by in EU Member States in early 2017.

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, 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 were obligated to transpose 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 for VoD will operate in the manner described above in any individual Member State. As a result, we may face inconsistent and uncertain regulation of our VoD services 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 retention and electronic commerce. In December 2015, the EU General Data Protection Regulation (GDPR) was approved with respect to data protection and retention, enhances existing legal requirements, creates a multitude of new rules, and sets out stiff penalties for organizations that fail to comply. The GDPR will be directly applicable in all Member States commencing in 2018, harmonizing the patchwork of 28 national privacy regimes. This is seen as a major step forward in achieving a digital single market. In addition, following the adoption of the GDPR, the EU Commission announced a review of the e-Privacy Directive, which regulates privacy related issues in the electronic communications sector.
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

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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 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 EU 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 a 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. These 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 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.
Furthermore in August 2013, the EU Commission issued an amendment to the Standby Regulation called Networked Standby (No 801/2013), which became 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 our costs and the 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 that 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 are in on-going discussions with relevant Member States and the EU Commission to be included in 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 and the EU Commission 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 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 spectrum, licensing arrangements, usage conditions and charges, license bidding and trading and enforcement and penalties). In addition, 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.
Telecommunications companies in the U.K., including Virgin Media , are 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. The U.K. Office of Communications (Ofcom) regulates on-demand programming, which 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 citizens in relation to communications matters and furthering the interests of consumers in relevant markets where appropriate by promoting competition. The Competition and Markets Authority also has jurisdiction with respect to competition matters.
Broadband Expansion. The U.K. government is attempting to drive the provision of super-fast 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. In addition, the U.K. government has

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announced that everyone will, by 2020, have a legal right to request a broadband connection of at least 10 Mbps, regardless of where they live. The U.K. government intends to achieve this by introducing a broadband Universal Service Obligation (USO) and it is aimed, in particular, at addressing the final 5% of the population. Virgin Media is currently considering the implications of the USO and is working closely with the U.K. government to understand the plan.
Television and VoD Services. Following a review by Ofcom, Sky’s Wholesale Must Offer (WMO) obligation, which regulates terms of the wholesale supply of Sky Sports 1 and 2 in SD and HD, has recently been removed. This has no impact on Virgin Media. The appeal of Ofcom’s original decision to impose the remedy in 2010 has now been withdrawn by all parties. It is possible, however, that the new Ofcom decision removing the obligation could be appealed.
In November 2014, Ofcom opened an investigation into the arrangements by which the FA Premier League collectively sells the live U.K. audio-visual media rights to Premier League football (soccer) matches. Ofcom’s investigation is on the basis that there are reasonable grounds to suspect that these arrangements appreciably restrict or distort competition in breach of the prohibition in Chapter I of the Competition Act of 1998 and/or Article 101(1) of the Treaty on the Functioning of the European Union. Ofcom is continuing its investigation, including undertaking further market research.

Strategic Review of Digital Communications. In March 2015, Ofcom launched a strategic review of U.K. digital communications, with the stated objective of ensuring that digital communications markets continue to work for consumers and businesses, with wide availability of high-quality services (both fixed and mobile). A “discussion document” was published in July 2015, inviting stakeholder comment and input. Key focus areas for Ofcom are: investment and innovation, delivering widespread availability of services; sustainable competition; empowering consumers; and, targeted regulation where necessary, deregulation elsewhere. Virgin Media responded to the ‘discussion document’ emphasizing the importance of investment for competition, innovation and consumer interest.
A key area of consideration is the future regulatory treatment of BT, in particular whether BT should be fully (structurally) separated, with the Openreach network division becoming a separate, independent company. An “emerging thinking” document is due to be published in late February 2016, setting out conclusions and any proposals for reform of the U.K. regime. This exercise would establish Ofcom ’s policy positions going forward and will influence and inform the approach taken for future market reviews.
Ofcom Review of Business Connectivity Markets. Ofcom is in the process of reviewing the U.K. Business Connectivity Markets (leased lines and dedicated business connections, among others). BT has provisionally been found to hold Significant Market Power in certain markets, with consequential regulatory remedies proposed by Ofcom. Among these is a proposed obligation for BT to provide access to its dark fiber. Virgin Media, in common with a number of other investors in network (including BT), is opposed to this proposed remedy and is in the process of lobbying against it. Ofcom is expected to publish final conclusions in the spring of 2016.
Mobile Service. As an 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 with respect to data roaming and sets maximum roaming rates within the EU. A new Regulation, effective June 2017, abolishes roaming tariffs in the EU (subject to addressing inconsistencies in underlying wholesale charges). A preceding transitional period has been established such that roaming surcharges will reduce significantly from April 2016.
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. Ofcom has set mobile termination charges for the period of 2015-2018, with rates reducing to approximately half of their starting levels by the end of this period. Virgin Media has experienced a reduction in revenue from such charges, although with some off-setting reductions in cost.
Germany
Germany has incorporated 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 (the 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.

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Regulation of the media falls within the authority of the German federal states (Bundesländer). 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) for the regulation of the private broadcasting sector. 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 also have authority with respect to the regulation of channel carriage fees, conditional access systems, interfaces, the bundling of programs and price regulation.
The allocation and use of analog cable transmission capacities for both radio and television channels in Germany is governed by the must carry rules of the respective German federal states. The allocation of digital transmission capacities for digital television and radio channels is 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 to carry at least 13, 23 and 24 analog channels, respectively, and also limits Unitymedia’s ability 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 our acquisition of the Unitymedia BW GmbH (formerly known as Kabel BW GmbH) (KBW) cable network in Germany (the KBW Acquisition), subject to our agreement with the following conditions:
Unitymedia 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 channel carriage fees Unitymedia 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 as of January 1, 2012.
Effective January 1, 2012, Unitymedia 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.
Effective January 1, 2012, upon expiration of the minimum term of an access agreement with a housing association, Unitymedia transferred the ownership rights to the in-building distribution network to the building owner or other party granting access. In addition, Unitymedia waived its right to remove its in-building distribution networks.
A special early termination right was granted with respect to certain of Unitymedia’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 for its unamortized investments in modernizing the in-building network based on an agreed formula. To the extent Unitymedia 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 than those in previous agreements.

The Netherlands

The Netherlands’ electronic communications law broadly implements the Regulatory Framework. According to this electronic communications law, the Autoriteit Consument & Markt (ACM), the Netherlands NRA, was required to 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, concluding 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.


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On August 5, 2013, ACM published its latest 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, and apply for a three year period. The decision was appealed by various operators, including us, and on August 27, 2013, the Dutch Supreme Administrative Court decided in a preliminary decision that the decrease of cap charges should be less steep than ACM had initially determined. These revised tariffs apply until the Dutch Supreme Administrative Court arrives at a final decision in the appeal proceedings on the merits. This final decision is not expected before the end of 2016 because the Dutch Supreme Administrative Court ruled on October 15, 2014, that it wishes to pose prejudicial questions to the European Court of Justice.
On January 1, 2014, the revised must carry obligations became effective. The revised must carry obligations do not only apply to cable operators, as was previously the case, but also apply to all providers of analog and digital program packages based on the principle of technology neutrality. Providers of digital program packages with 100,000 or more subscribers are subject to the obligation to provide at least 30 television channels, including six public television broadcasting channels as a must carry obligation, a limited amount of regional and local television broadcasting channels and a number of digital radio broadcasting channels. In addition, all providers of analog program packages with 100,000 or more subscribers must include at least 15 television channels, including five public broadcasting channels as a must carry obligation, a limited amount of regional and local television broadcasting channels and some analog radio broadcasting channels. The Dutch Media Authority can grant a (conditional) exemption from the obligation if the must carry obligations listed above give rise to disproportionate costs for the network operator, an impediment to innovation or other unreasonable outcomes.

There is no regulated financing mechanism in place between network operators and broadcasters. Commercial and public program providers must negotiate with network operators regarding transmission fees.

In connection with the acquisition of the outstanding shares of Ziggo (the Ziggo Acquisition), we obtained regulatory clearance from the EU Commission on October 10, 2014. The clearance was conditioned upon our commitment to divest our Film1 channels to a third-party and to carry Film1 on our network in the Netherlands for a period of three years. On July 21, 2015, we sold our Film1 channels to Sony Pictures Television Networks. Under the terms of the agreement, all five Film1 channels will continue to be carried on certain of our networks for a period of at least three years.

In July 2015, the Dutch incumbent telecommunications operator filed an appeal against the EU Commission regarding its decision to approve the Ziggo Acquisition. We are not a party to the appeal and we do not expect that the filing of this appeal will have any impact on the ongoing integration and development of our operations in the Netherlands.

Following the EU Commission’s clearance of the Ziggo Acquisition, on October 31, 2014, ACM published as part of the fourth round of market analysis a draft of market analysis decision on LLU. In this draft decision, ACM found that there is a risk of joint dominance of KPN and Ziggo in the related retail broadband market, which would be remedied on the wholesale market for LLU where ACM found a risk of single dominance of KPN. This draft decision was subject to national consultation followed by notification to the EU Commission. The EU Commission issued serious doubts regarding the draft LLU decision, causing ACM to redraft their initial decision. After another national consultation in July 2015 and European notification in November 2015, ACM published the final decision on December 17, 2015. In the final decision, ACM no longer finds a risk of joint dominance for KPN and Ziggo at the retail level but still concludes that there is a risk of consumer harm due to prices being set above the competitive equilibrium. At the wholesale level, ACM concluded that Ziggo is not part of the relevant LLU market and that KPN is dominant on that market, and ACM imposed obligations on KPN only.

Belgium
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. Since April 1, 2012, reciprocal termination rates have been imposed, which results in Telenet charging the interconnection rate of the incumbent telecommunications operator, Proximus. On July 14, 2015, the BIPT published a draft decision regarding the wholesale tariffs for call termination on the public telephone network provided at a fixed location. The BIPT has organized a public consultation on this draft decision, which was open for reactions until September 15, 2015. This draft decision has not yet been submitted to the EU Commission for notification. A final decision is expected in 2016.
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

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a steep rate reduction that resulted in (1) an initial 45% decline effective August 1, 2010, over the then average rate and (2) a further decline in January 2013 that was 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 cents per minute, and to date, 2015 rates have not been set. On September 14, 2015, the BIPT published its draft decision on the relevant market for “call termination on individual mobile networks”. Telenet, as an MVNO, has been designated in the draft decision as having Significant Market Power. In the draft decision, the BIPT adopts a bottom-up long run incremental cost model to calculate tariffs for call termination on individual mobile networks, resulting in a nominal value of €0.81 per minute in 2015 and a declining glide path up and until 2020. The BIPT organized public consultation on this draft decision, which was open until November 14, 2015. This draft decision has not yet been submitted to the EU Commission for notification. A final decision is expected in 2016.
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. The Belgium Regulatory Authorities adopted a final decision on July 1, 2011 (the July 2011 Decision) with some minor revisions. The regulatory obligations imposed by the July 2011 Decision include (1) an obligation to make a resale offer at “retail minus’’ of the cable analog package available to third-party operators (including Proximus), (2) an obligation to grant third-party operators (except Proximus) 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 Proximus).
In February 2012, Telenet submitted draft reference offers regarding the obligations described above, and the Belgium Regulatory Authorities published the final decision on September 9, 2013. Telenet has implemented the access obligations as described in its reference offers and, as of June 23, 2014, access to the Telenet network had become operational and can be applied by wireless operator Mobistar SA (Mobistar). In addition, as a result of the November 2014 decision by the Brussels Court of Appeal described below, on November 14, 2014, Proximus submitted a request to Telenet to commence access negotiations. Telenet contests this request and has asked the Belgium Regulatory Authorities to assess the reasonableness of the Proximus request. The timing for a decision regarding this assessment by the Belgium Regulatory Authorities is not known.
On December 14, 2015, the Belgium Regulatory Authorities published a draft decision, which amended previously-issued decisions, that sets forth the “retail-minus” tariffs of minus 26% for basic television (basic analog and digital video package) and minus 18% for the bundle of basic television and broadband internet services during an initial two-year period. Following this two-year period, the tariffs would change to minus 15% and 7%, respectively. The draft decision was notified to the European Commission and a final decision is expected in the first quarter of 2016. A “retail-minus” method of pricing involves a wholesale tariff calculated as the retail price for the offered service by Telenet, excluding VAT 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).

Telenet filed an appeal against the July 2011 Decision with the Brussels Court of Appeal. On November 12, 2014, the Brussels Court of Appeal rejected Telenet’s appeal and accepted Proximus’s claim that Proximus should be allowed access to Telenet ’s, among other operators, digital television platform and the resale of bundles of digital video and broadband internet services. On November 30, 2015, Telenet filed an appeal of this decision with the Supreme Court. Telenet and wireless operator Mobistar each filed an appeal with the Brussels Court of Appeal against the decision regarding the quantitative aspects of the reference offers. A decision with respect to these appeals is expected in 2016. There can be no certainty that Telenet’s appeals will be successful.

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.

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 (Bundesgesetz über Radio und Fernsehen) 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.

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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 their infrastructure to third parties, including LLU access. This access regulation, however, is restricted to the copper wire network of the incumbent, Swisscom. Therefore, such unbundling obligations do not apply to UPC CHAT in Switzerland 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. Dominant operators are obliged to provide interconnection and all providers of services forming part of the universal service in Switzerland have to ensure interoperability of services.
The Federal Council has suggested that the current Telecommunications Act be revised in two steps. First, the Federal Council plans to introduce measures to allow for easier access to the incumbent’s network, better consumer protection (decreasing roaming fees, unbundling of products, measures to prevent spoofing) and a slight change to the regulatory regime (introducing partial ex-officio rights for the Federal Communications Commission). Second, the Federal Council plans to introduce technology neutrality into the Telecommunications Act, as well as to further implement consumer and youth protection measures. Possibly, the topic of regulated net neutrality may be introduced in a secon