NTL is currently in talks to merge with Virgin Mobile in a deal that would create a potential rival to the now broadband-enabled BSkyB.
Virgin Mobile’s official word?
The Board of Virgin Mobile Holdings plc confirms that it has received an approach from NTL Incorporated that may or may not lead to a formal offer being made for the Company.
Shares of Virgin Mobile immediately climbed to a record high after NTL/Telewest announced its £835m ($1.44 billion) takeover bid.
If the bid is successful, it will create the first media group to serve up mobile and fixed-line telephony, broadband Internet access and pay-TV.
(Ed: It has a similar resonance as the deal between 3 Italia and Canale 7)
We’ve found that getting straight numbers of subscribers for each separate business is difficult. The figures that the Guardian are quoting for the merged Virgin/NTL/Telewest uber-company are impressive too, accounting for 10m customers, 3.3m television customers, over 5m mobile phone users, 2.5m broadband Internet customers and 4.4m fixed-line telephone accounts.
NTL/Telewest do have to do something pretty radical as they feel the pressure from other previously unrelated business getting in on their main business areas.
The new company will go under the Virgin brand, and would become the biggest Virgin-branded business in the world, outstripping the music retail business which launched Branson’s career and the Virgin Atlantic airline business.
In a fiercely competitive market, cable companies on both sides of the Atlantic are looking to outflank their satellite and phone company rivals by adding mobile phone services to their portfolio of voice, Internet and TV services.
NTL is the UK’s number two pay-TV operator after BSkyB’s Sky and is also the second-largest residential telephony provider after BT Group.
Long seen as a juicy takeover candidate, Virgin Mobile is the fifth-largest UK mobile phone carrier. The company operates on rented capacity on T-Mobile’s UK network.
Virgin Mobile current 4 million users (source Virgin Mobile) in the UK, puts them at less than a third of the UK market leader, o2’s, who have 15 million users.
NTL and Telewest have notched up around 5 million subscribers combined, next to BSkyB’s 7.8 million digital television viewers.
If the deal goes through, it won’t be the first time the two companies have worked together – in 1996 they launched the Internet service provider Virgin Net, which had an original owner ship of NTL with 49% and Virgin, 51%. The enterprise was fully taken over by NTL in 2000 but still trades under the powerful Virgin brand name.