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ntl Telewest and Virgin Mobile agreement reached

# 4 April 2006, 13:53 by Cable Forum

ntl Telewest issued a press release this morning detailing an agreement between themselves and Virgin Mobile that has been reached. The agreement is to re-brand all consumer operations with the Virgin brand within one year of the Virgin board approval of the brand license. Combining their businesses will make them the first UK company to offer quadruple play to customers – Broadband, TV, fixed and mobile telephony.

ntl will enter into a 30 year exclusive brand licence with Virgin Enterprises Limited for the use of the Virgin brand. ntl had made yet another offer of £962.4Million, up on the original £871Million attempt. Richard Branson’s Virgin Enterprises stands to make 0.25% of ntl Telewest revenue from licensing the Virgin brand to ntl Telewest, and at minimum £8.5million per year.

Commenting on the offer, James Mooney, Executive Chairman of ntl, said:

We are delighted to announce the recommended Offer and the brand licensing with Virgin today, which not only delivers mobile capability to our product bundle but also gives us access to a leading consumer brand. It truly is a step-change transaction not only for ntl but for the media sector as an whole in the UK.

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.

Commenting on the offer, Charles Gurassa, Chairman of Virgin Mobile, said:

After careful consideration, the Independent Directors of Virgin Mobile intend to recommend ntl’s Offer to shareholders. This Offer reflects the strong operational and financial performance of Virgin Mobile and represents an excellent opportunity for Virgin Mobile shareholders to realise the significant increase in shareholder value since flotation. We believe this Offer is in the best interests of Virgin Mobile’s shareholders, customers and employees.

ntl and Telewest only recently completed their merger and it will probably still be some time before both businesses integrate and combine their products and services. Virgin Mobile will continue operating as a separate company for the time being until approval is reached from shareholders. This agreement may be reached in June 2006.

The ongoing process of integrating ntl’s legacy business with the business of Telewest was apparently designed to enable ntl also to absorb Virgin Mobile, were it be to acquired. In the immediate future, ntl does not intend fully to integrate Virgin Mobile into ntl’s operations. The release states that ntl management’s priority would continue to be the integration of ntl’s legacy cable businesses operations with those of Telewest, and the exploitation of the benefits of the merger of ntl and Telewest.

ntl also expects to benefit from Virgin Mobile’s high street presence (which includes over 100 “stores within stores” in Virgin Megastores and WH Smith stores, through which it intends to sell other ntl products).

More Information see press release in pdf format:-

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