Virgin Mobile & NTL to merge?

[3GScottishUser]

From The Sunday Times (04/12/2005):

SIR Richard Branson is to combine Virgin’s mobile phone business with NTL, the cable television company, in a bid to create a new powerhouse in the television and telecoms industries.
This weekend, Branson’s advisers were in advanced talks with Simon Duffy, chief executive of NTL, to merge their businesses in a deal likely to be valued at £7 billion or more.

The new company will adopt the Virgin brand, and will be the biggest business to use a name that is synonymous with Branson, the billionaire who is one of Britain’s most successful businessmen.

The intention is to create a combined media and telecoms business that could offer customers four services — television, fixed-line telephony, mobile phone and broadband internet connections.

It is hoped this “quad-play” offering will give the new company an advantage over leading rivals such as Sky Television, BT and Orange, owned by France Telecom. Sky is 38% owned by News Corporation, the ultimate owner of The Sunday Times.

It was not clear last night whether NTL intends to make a cash offer for Virgin Mobile, which is separately quoted on the London stock market.

However, Branson intends to take shares in NTL as payment for the 72% stake that Virgin Group holds in Virgin Mobile. This would give Branson an estimated 15% stake in the combined NTL/Virgin Mobile business, worth close to £1 billion.

Branson and Virgin Group may receive a further substantial payment as NTL would have to reward Branson for using his brand for television, broadband and fixed-line telephony services.

Virgin Mobile, which has 5m customers, has a value of nearly £800m, having increased in value by more than 50% since its flotation last year.

NTL is in the process of a £6 billion merger with Telewest, Britain’s other cable television company. NTL, Virgin and Virgin Mobile are expected to make an announcement to the London stock exchange tomorrow.

http://www.timesonline.co.uk/newspap...903898,00.html

[Hands0n]

Good old Richard Branson, what a marvelous success this is likely to be with the Virgin brand being so instilled in the consciousness of every Briton. NTL would be insane not to capitalise on it, even if it does put yet more money in Branson's pocket.

And so we seem to be witnessing a rush for the creation of general "media" companies providing the full gammut of such offerings. Good for the business or not? Signals of the death knell for the independent ISP-only? I certainly hope not.

If the Branson-inspired competitiveness in the Virgin brand is allowed to function the new company could be a formidable opponent to the other such media company formations.