NTL confirms Virgin Mobile buy-out
NTL has finally confirmed that it is to acquire Virgin Mobile as part of a master plan to create a giant communications company to take on pay TV outfit Sky and incumbent telco BT. The deal values Virgin Mobile at £962.4m - almost £150m more than was originally rejected by the Virgin Mobile board in December last year.
As part of the deal, NTL (which is already merging its operations with Telewest) has entered into a 30 year exclusive brand licence with Virgin Enterprises Limited to use the Virgin brand for the cableco's consumer business.
Not only does NTL reckon the deal is good news for shareholders, it predicts that it will help transform the operations from a triple-play cable provider into "a national entertainment and communications company, harnessing the powerful Virgin consumer champion brand".
This increase in size will also enable the business to "compete more effectively with the large incumbents in the UK telecommunications market" as it looks to develop "converged fixed and mobile telephony devices, and video and voice services".
And with a shiny new brand with Virgin's appeal, the group is hoping it will be able to increase consumer numbers and reduce churn.
NTL chief exec James Mooney said: "Central to today's announcement is our strong belief that offering a quad-play underpins true media convergence, and offering high quality communications services will, we believe, appeal to existing subscribers of the enlarged business, as well as new customers. There is a natural appeal for mobile, telephony, broadband and television content and ntl is now truly unique in its mass market product offering." ®