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Friday, 28 July, 2000, 22:25 GMT 23:25 UK
NTL takes over Virgin ISP
NTL logo and person using net
NTL is expanding rapidly in the UK
The UK cable company NTL is to take over the Virgin Net internet service provider (ISP) operation.

The deal will see NTL get an ISP business with about 560,000 customers.

We are now setting our sights on becoming market leader in the UK

Barclay Knapp, NTL
The value of the deal was not disclosed in the statement, but the Financial Times reported that the agreement valued at about 240m ($362m).

Added to its existing customer base, NTL will have more than one million internet subscribers.

That makes it the third biggest ISP in the UK after Freeserve and AOL.

Breakthrough deal

The proposed deal sees Virgin taking control of's content and e-commerce operations.

Prior to the deal, NTL owned 49% and Virgin 51% of the net operation.

To become a major global internet player

Sir Richard Branson's ambition
The deal gives Virgin a presence in NTL's digital television services.

It also gives NTL the breakthrough as a large-scale ISP in the UK, something that it has been seeking.

Earlier this year it launched an unmetered access deal which it hoped would attract many more subscribers, and it was also reported to have been considering a bid for Freeserve.

A message on the website told Virgin ISP subscribers that they would not see any changes in the near future.

Changing times

The deal, although agreed, is subject to due diligence by both sides.

Barclay Knapp, NTL chief executive, said the four year old Virgin Net had proved a success but that the time had come for change.

"With the changes in the structure and dynamics of the UK internet market, NTL and Virgin want to align the separate businesses which make up Virgin Net with our respective internet strategies," he said.

"NTL is focused on building up critical mass in subscriber numbers to be able to offer our customers better and richer content and services. We are now setting our sights on becoming market leader in the UK."

Virgin group's high profile chairman, Sir Richard Branson, said Virgin would be looking to "aggressively grow" the new content and e-commerce business from Virgin Net, working closely with Virgin's other internet operations "to become a major global internet player".

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See also:

14 Jun 00 | Business
NTL bids for growth
11 Jun 00 | Business
NTL 'is Freeserve favourite'
02 Jul 00 | Business
Virgin in energy deal
28 Jul 00 | Business
Web access set for radical change
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