Cable TV and telephone operator NTL, currently merging with Telewest, is to take over Virgin Mobile, now valued at nearly £1bn.
As part of the deal, NTL will license the Virgin Mobile brand for thirty years, paying £8.5m a year at a minimum for the privilege. Shareholders in Virgin Mobile will be able to sell their shares at 372p a pop, acquire NTL shares, or a combination of the two. The deal will see Sir Richard Branson's Virgin Group as the largest shareholder of the new entity.
Multiple sources, including the BBC, are reporting that one of the main intentions of the acquisition is to allow NTL to offer a quadruple service: TV, Internet, landline telephone and mobile phone, something which will be a first for the UK
The takeover could help NTL rival pay-TV company BSkyB, by offering this four-service package to customers. Large telephone operators such as BT could also face competition from the ever-growing cable company.
For the next year or so, Virgin Mobile will continue to run fairly independently, as NTL directs most of its attention towards completing the merger with Telewest.
Merging with rival pay-TV providers, adding mobile phone services to its portfolio... is NTL turning into the UK's next media giant?
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