NTL is to buy Virgin Mobile for £962m to enable it to enter the growing mobile entertainment and communications space.
Virgin Mobile is 71%-owned by Richard Branson, who is expected to take a combination of cash and NTL shares as part of the deal.
Branson rejected NTL’s original bid of £871m last year. NTL will license the Virgin brand name for its new mobile company for 30 years as part of the acquisition. The brand is held by a separate company controlled by Branson.
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The new combined company will have sales of £4.5bn and 10 million customers.
Such a company will be able to offer the market mobile, fixed-line, broadband and digital TV services to become a so-called “quadruple player”.
Earlier this month, NTL completed the takeover of cable TV rival Telewest. The combined companies are able to offer a cable broadband service to 50% of UK homes and 85% of businesses.
Virgin Mobile recently announced that it would be the first mobile operator to allow its customers to view live TV on their handsets, after signing a deal with BT and Microsoft.
Virgin Mobile said it will start offering the broadcast service later this year, although it is not clear exactly how many users will initially be given access to the mobile TV content.