31 July 2000

Britain's leading cable network, NTL, is to buy-out Virgin Group’s stake in joint venture VirginNet for an estimated £240m ($362m). The deal adds some 560,000 ‘subscribers’ to NTL’s existing internet customer base, bringing the total to over one million and lifting it into the UK’s top three ISP ranking (after FreeServe and AOL).

Virgin, however, will retain control of VirginNet's content and e-commerce operations. The buyout also gives the Branson-owned company a presence in NTL's digital television activities.

Virgin Group, which pursues a policy of minority holdings in most of its activities, will be more comfortable with its new role than the joint venture – which earlier this month aborted its planned foray into free unmetered internet access. [WAMN, 20-Jul-00].

Says NTL chief executive, Barclay Knapp: "With the changes in the structure and dynamics of the UK internet market, NTL and Virgin want to align the separate businesses which make up Virgin Net with our respective internet strategies. NTL is focused on building up critical mass in subscriber numbers [so as] to … offer our customers better and richer content and services. We are now setting our sights on becoming market leader in the UK."

News source: BBC Online Business News (UK)