The British cable TV company NTL is buying Virgin Mobile in a deal that values the phone company’s share capital at nearly 1.4 billion euros. Virgin had rejected a previous offer as too low.
NTL will also reportedly pay Virgin around 13 million euros a year for the use of its name under a thirty year licencing agreement. From now on all NTL’s services will carry the Virgin brand.
Virgin, with four million customers, is not one of the UK’s larger mobile phone firms.
Vodafone is the biggest, in terms of turnover, with 7.1 billion euros last year. It is followed by French owned Orange with turnover of 6.2 billion euros; O2, which is being bought by Spain’s Telefonica, had turnover of 5.6 billion euros and and T-Mobile, which is part of Deutsche Telekom, managed four billion euros.
Sir Richard Branson, whose Virgin Group owns 71% of the mobile phone operator, will become NTL’s largest single shareholder with a seat on the board of the merged company.
This deal was announced as Branson launched Virgin Mobile in France where he accused the current suppliers of “ripping off” customers.
With this move, NTL becomes Britain’s first so-called “quad-play” company, with cable TV, internet access, fixed line and mobile phone services.
Industry experts say it is easier to attract customers if that can all be offered in one package.