NTL Wins Virgin Mobile in 'Quadruple Play' Move

05 April 2006

Lossmaking US cable operator NTL, which operates only in the British Isles, on Monday received an enthusiastic 'yes' to its £962 million ($1.67bn; €1.38bn) offer for Virgin Mobile.

The listed UK cellphone company, which claims more than five million subscribers, is among the nation's smaller telcos, operating via the German-owned T-Mobile network.

The acquisition adds a fourth string of cellphone connectivity to NTL's existing triple whammy of TV, internet and fixed-line telephony. More importantly, the deal creates mouthwatering opportunities for cross-selling with Virgin's 5m customer base.

But most important of all, NTL has entered into a 30-year exclusive brand licence with Virgin Enterprises that confers on the US company the right to use the Virgin brand for all its UK consumer businesses.

Given NTL's lacklustre reputation for customer service, its image can only be enhanced by the Teflon-coated Virgin brand, to say nothing of the carefully cultivated consumer appeal of the ubiquitous Sir Richard Branson.

Presumably Branson, who becomes the largest single shareholder in the joint enterprise, will be keeping a 24/7 watch on NTL's customer service performance - lest the latter's failure causes the transfusion of brand values to go into reverse.

Data sourced from Bloomberg.com; additional content by WARC staff