NTL Incorporated

1992–2006 Barclay Knapp and George Blumenthal, the founders of American cellular network company Cellular Communications, Inc. (sold to Airtouch in 1996), established International CableTel in 1993 to take advantage of the deregulation of the UK cable market. Initially, Cabletel acquired local cable franchises covering Guildford and parts of Northern Ireland, Scotland and Wales. In 1996 CableTel acquired National Transcommunications Limited (NTL), the privatised UK Independent Broadcasting Authority transmission-network. In May 1998 CableTel adopted "NTL" as its new name. The company spent heavily: both on expanding its network and on acquiring rivals (in 1999, it acquired Cambridge Cable, one of the earliest digital networks, that had been installed across the university city ten years earlier). In July 1999, NTL purchased the consumer assets of Cable & Wireless plc for nearly £8.2 billion, integrating the telephone, internet and television operations of Cable & Wireless into its own ever-expanding operation. Devalued and struggling with debts of around $18bn, NTL had to seek Chapter 11 bankruptcy-protection in May 2002 in order to organise a refinancing deal. The company did not emerge from protection until January 2003, having converted around $11bn of debt into shares – technically, this amounted to the largest debt default in US corporate history. The company reduced its debt to $6.4bn. A re-organisation split NTL itself into NTL Inc. (covering the UK and Irish markets) and NTL Europe Inc. (for the French, Swiss and German parts of the corporation). New executives replaced the NTL president, CEO and co-founder Barclay Knapp, as well as Stephen Carter, the MD and COO. After exiting from Chapter 11 protection NTL produced an operating profit. In 2004, it announced plans to split the broadcasting division off from the main company. In December 2004, NTL sold its broadcast-unit to a consortium led by Macquarie Communications Infrastructure Group (MCG) for £1.27 billion. Macquarie renamed the division Arqiva in May 2005. This sale allowed NTL to focus on its "core businesses" of providing communications packages and cable services. In late 2004, NTL purchased the remaining shares of the Internet service provider (ISP) virgin.net, originally a joint venture between NTL and Richard Branson's Virgin Group. By 2005, its UK network consisted of a 7,800 km fibre backbone with the potential to reach 8.4 million residential homes and around 610,000 businesses. In January of that year, NTL started rolling out video on demand. With content selected by NTL, this service covered genres including music videos, children's programming and adult entertainment, as an extension to the basic 'pay per view' services the company offered for film and sport content. The new service allowed customers to rewind, fast forward and pause content. Despite NTL Ireland turning a profit, in May 2005, NTL sold their Dublin, Galway, and Waterford cable business (which they had acquired in 1999 for €825 million from the Irish government) to UGC Europe for €325 million – this after having spent in excess of €100 million on network infrastructure, resulting in a loss of €500 million, more than 50% of the purchase price. Liberty Global continued to use the NTL brand in Ireland, but was eventually merged with Chorus Communications and rebranded as UPC Ireland in May 2010. By July 2005, NTL had cut its debt to £1.445 billion with an operating cashflow of £178 million. The company had 3.2 million customers buying at least one service from them, with the 1.4 million subscribers to broadband services making NTL the market leader in this field. Telewest NTL/Telewest merger From late 2003 discussions commenced on a merger between Telewest and NTL. Thanks to their geographically different areas, NTL and Telewest had co-operated previously, as in re-directing potential customers living outside their respective areas. On 3 October 2005, NTL announced a USD$6 billion purchase of Telewest, forming one of the largest media companies in the UK. The merger agreement as structured would have left NTL having to negotiate with BBC Worldwide, the BBC's commercial arm, due to a change-of-ownership clause written into the agreement for UKTV, a joint venture with Telewest's Flextech content division. To prevent this, Telewest instead acquired NTL. The parties completed the merger on 3 March 2006, making the merged company the UK's largest cable-provider, with more than 90% of the market. Once merged, the combined company renamed itself to ntl:Telewest, with ex-NTL shareholders controlling 75% of the stock and ex-Telewest shareholders 25%. Nine of the eleven directors of the new board came from NTL and two from Telewest. Virgin Mobile merger In December 2005 NTL and Virgin Mobile announced that talks had taken place regarding a merger. Virgin Mobile's independent directors rejected the original bid of £817 million ($1.4 billion), taking the view that NTL's bid "undervalued the business". Sir Richard Branson reportedly expressed confidence that a re-structured deal could go ahead, and in January 2006 NTL increased its offer to £961m (372p per share). On 4 April 2006, NTL Incorporated announced a £962.4m recommended offer for Virgin Mobile. According to reports, Branson accepted a mix of shares and cash, making him a 10.7% shareholder of the combined company. The takeover, which was completed on 4 July 2006, created the UK's first 'quadruple play' media company, bringing together television, Internet broadband, mobile-phone and fixed-line phone services. The deal included a 30-year exclusive branding agreement that saw NTL adopt the Virgin name across its consumer operations as it merged operations with its current Telewest brand. As a result, on 8 November 2006, NTL announced it would change its name to Virgin Media plc. Proposed ITV merger In November 2006, NTL announced that it had approached commercial television broadcaster ITV about a proposed merger. BSkyB effectively blocked the merger on 12 November 2006, when it controversially bought a 17.9% stake in ITV plc, a move that attracted anger from NTL shareholder Richard Branson and an investigation from media and telecoms regulator Ofcom. On 6 December 2006, NTL announced that it had complained to the Office of Fair Trading about BSkyB's move, and that it would withdraw its attempt to buy ITV plc, stating that it did not believe that it could currently make a deal on favourable terms. == Services ==