The Telegraph
Since 1st March, 1999
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Coming up: Virgin test for Murdoch

London, Dec. 4: Sir Richard Branson, the billionaire entrepreneur, is to take on the might of Rupert Murdoch by creating a giant television, Internet and telephone company.

It is understood that the Virgin media group will make an audacious attempt to snatch the premiership television rights from Sky when they come up for auction next year.

Sir Richard plans to merge Virgin Mobile with NTL, the huge cable TV company, in a '4.5 billion deal that will give access to TV screens in over five million British homes.

This would make Sir Richard one of the most powerful figures in television and threaten Sky TV, part-owned by Murdoch’s News Corporation ' the owners of the Times, Sunday Times and Sun ' and run by his son James.

The new Virgin media and entertainment group will also have 2.5 million broadband Internet customers, 4.3 million fixed-line telephone accounts and more than five million mobile customers.

One investment banker said: “It’s the battle of the brands ' Virgin versus Sky.”

Virgin will become the first company in Britain to be able to offer a package of mobile and fixed line telephones, pay-television and high-speed Internet services. It will also show television programmes on Virgin mobile telephones.

Claire Enders, of Enders Analysis, a telecom research firm, said on Saturday that the deal will increase the pressure on Sky.

“The Virgin brand is exceptionally powerful,” she said. “The deal makes great financial sense for NTL and will strengthen its proposition. Virgin Mobile is one of the most successful mobile companies of its type in the world. It has excellent growth prospects.”

Sky paid '211 million this year to buy Easynet, an internet company, so that it could sell broadband internet services to its 7.8 million television customers. However, it does not have a mobile phone arm and could find that its customers are lured away to the new, wide-ranging Virgin entertainment group.

Sky could see defections accelerate if Sir Richard wins the right to broadcast live premiership football.

In strictly financial terms, the deal will see NTL acquiring Sir Richard’s Virgin Mobile. However, the cable company’s name will be replaced by the Virgin brand and Sir Richard will be the largest shareholder in the new company.

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