NTL takes over Virgin Mobile

Entrepreneur Sir Richard Branson yesterday saw his Virgin brand extend to 9.4 million UK households following the long expected acquisition of his Virgin Mobile business by cable giant NTL.


The £962.4 million cash and shares deal creates the first company in the UK to promote a "quadplay" offer of cable TV, internet access, fixed line telephony and mobile phone services.

The enlarged company will be rebranded as Virgin over the next 12 months and combines the 5.1 million cable customers of NTL, who include a number in the Tamworth and Lichfield areas, with the 4.3 million users of Virgin Mobile phones.

NTL caught the market by surprise last December when it revealed its takeover interest in Virgin Mobile and an ambition to create a company that could take on the might of BSkyB in broadcasting and BT in telecoms.

Its overtures were initially frustrated by the Virgin Mobile board, led by chairman Charles Gurassa, which feared that small shareholders were getting a raw deal.

This was overcome when Sir Richard agreed to accept less than other investors for the 71.2 per cent stake held by his Virgin Group to secure the marriage just a month after NTL completed a landmark merger with cable rival Telewest, which has thousands of customers in Birmingham and the Black Country.

Sir Richard will own 10.7 per cent of the combined company and will have a representative on its board.

NTL president and chief executive Stephen Burch stressed that the strength of the Virgin brand was crucial.

Virgin Mobile rents airtime from Deutsche Telekom’s T-Mobile UK arm and its customer base has long been regarded as one of the prize assets in Europe’s fast consolidating telecoms and media industries.

NTL has secured an exclusive licence for the Virgin brand in consumer services, paying a minimum annual royalty of £8.5 million or 0.25 per cent of its consumer revenues.

Describing the Virgin brand as "an extremely powerful engine for future growth", Mr Burch said it would boost customer loyalty and stem the drift of subscribers to rivals such as BSkyB.

NTL chairman James Mooney added: "The takeover will provide a strong platform for converged products, such as converged fixed and mobile telephony devices, and video and voice services."

NTL also expects to benefit from the presence of Virgin Mobile on the high street through its 100 concessions within WH Smith stores and Virgin Megastores where it intends to sell quad-play and other products.

The New York-listed firm said integrating Telewest was its focus this year, with Virgin Mobile being run by its existing management almost independently.

Harnessing Telewest to its operations put it in the number one spot for providing broadband internet access, second place for fixed-line telephony and maintained its position as the second largest provider of pay TV.


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