Wednesday, December 07, 2005

Why NTL Likes Virgin

BusinessWeek reports on NTL's $1.4 billion bid for Virgin Mobile, Britain's largest mobile virtual network operator, with 5 million subscribers.
Bob House at telecom consultancy Adventis said, "This move could change the landscape in Britain, where it is one of the most significant telecom deals we've seen in the last five years. This gives NTL a breadth that, at the moment, no one else can match."

The current industry long-term Holy Grail is a "quadruple play package of mobile and fixed line phone service, broadband, and TV" with "next-generation handsets that will seamlessly switch from mobile networks to fixed-line networks, depending upon the customer's location" and can download content. However, it still in the formative stages.

Ian Fogg at JupiterResearch said, "This allows NTL to offer voice and potentially other entertainment services such as mobile TV over a mobile phone network through Virgin, enabling them to add another technology platform and another set of products to their offering."

Julian Hewett at Ovum added, "The Virgin brand gives the new company credibility," and "badly needed customer service expertise, something Britain's cable operators are sorely lacking."

Fogg noted that "NTL can't afford to take its eye off the ball, as each of the markets it operates in -- television, broadband, and telephony -- are extremely competitive." Adventis' House concurred stating, "NTL will have to execute the integration very carefully so as not to damage the Virgin brand."