Courtesy of Jack Schofield of the Guardian Unlimited’s tech blog, The Sunday Telegraph is giving even greater heft to the rumors that the UK mega-corporation headed by Richard Branson will buy cable company NTL with an eye toward merging it with Virgin mobile voice businesses into a new media unit.
The new unit will account for 2.5 mil. broadband internet customers, 4.3 million fixed-line telephony accounts, more than 5 million mobile phone customers and revenues in excess of £4 billion (or $7.8 billion). But that’s not the interesting part.
The deal is likely to spark a competitive response by Murdoch-owned BSkyB, which views the cable company as its main competitor and is currently on the hunt for a landline-based revenue stream of its own. Once Murdoch’s News Corp. feels the sting of stiffened competition in the UK, it’s likely that News Corp.-controlled DirecTV in the U.S. will ramp up its efforts to compete with cable companies on interactive services such as high-speed Internet access.
Update: The New York Times also covers this transaction, but spins it as a deal for Virgin to sell its mobile voice services to NTL. Both papers are reporting that the tentative transaction calls for Branson to sell his 71% stake in Virgin Mobile and then hold a 14% stake in the new combined company, which will retain the Virgin name.
Cynthia Brumfield at 7:25 PM|Comments(0)
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