NTL and Virgin Mobile Confirm Merger Discussions

5th December 2005 -NTL have confirmed their approach to Virgin Mobile to combine the two companies. If the deal goes ahead, the new company would be the first in the UK to be able to offer a significant quadruple play offering.

It's a threatening move to other providers moving into the delivery of TV services via broadband, particularly BSkyB and BT Entertainment. NTL and Virgin have a current combined subscriber basis of 10 million.

ntl already has a licence agreement with Virgin Enterprises for the exclusive use of the Virgin brand in the broadband area and is in discussions with Virgin Enterprises to extend that licence to cover television and fixed line and mobile telephony. If the proposed combination with Virgin Mobile and the licence agreement are completed, ntl intends to use the Virgin brand to offer a quadruple play of internet, television and fixed line and mobile telephony.

Under the potential offer, Virgin Mobile shareholders would be offered .09298 shares of ntl common stock per share of Virgin Mobile as well as a full cash alternative at 323p per share. The potential share offer values Virgin Mobile at 323p per share based on ntl's closing price on 2 December 2005.

Virgin Group, which owns 72 per cent of Virgin Mobile, has given verbal assurances to ntl that, if a transaction proceeds, it intends to elect to exchange its stake in Virgin Mobile for a continuing equity participation in the ntl Group although it has reserved the right to take a small portion of its consideration in cash. ntl has held preliminary discussions with T-Mobile, Virgin Mobile's network provider, who has also indicated that it is supportive of the proposed combination.

For more information please visit http://www.ntl.com and http://www.virgin.com