The ratings on Virgin Media Inc. (VMI) are constrained by the challenging and very competitive U.K. operating environment, resulting in restricted revenue growth prospects; significant gross leverage; and medium-term debt maturities. The company benefits from high bandwidth, a two-way network, an established customer base, a focus on improving operating efficiency and practices, and free cash flow generation. The company's total reported debt at March 31, 2007, was £6.2 billion. Despite innovation, revenues remain flat as VMI continues to face aggressive and some financially stronger competitors in all its divisions, although internal efficiency has supported margins. Competition is most pronounced for the broadband and fixed and mobile telephony products, and disputes with supplier and competitor British Sky Broadcasting Group PLC (BSkyB;
