Virgin media baron Branson takes on Murdoch

Virgin media baron Branson takes on Murdoch, by Maria Nguyen
(Credit: B&T)

Note: Mediaman pitched this news to B&T whilst Virgin Star was its client

Flamboyant billionaire Sir Richard Branson will soon be adding ‘media baron’ to his name with reports that he’s set to merge his mobile phone company Virgin Mobile with UK pay TV and telecommunications giant NTL to create a AUD$10.4bn media and entertainment empire that will tackle the dominance of Rupert Murdoch’s British Sky Broadcasting.

NTL is a leading UK Internet, telephone and pay TV operator that is publicly listed in Europe and the US. The company is expected to rebrand under the Virgin banner as part of the AUD$10.4bn deal, that will see Branson swap his 72% holding in Virgin Mobile for a 14% stake in the newly merged entity, which will boast 9 million customers and more than AUD$10bn in revenues.

Branson will be the largest single shareholder in the new company.

The new Virgin company will be the UK’s first to offer a quadruple bundled service of pay TV, Internet, mobile and fixed-line telephone.

According to media reports, the new group will up the ante in the lucrative UK pay TV market and is expected to pose a significant threat to BskyB, which is 37% owned by Rupert Murdoch’s News Corporation (Branson is already said to be determined to wrestle the Premiership football rights way from BskyB).

“James Murdoch [who heads up BskyB] is going to choke on his muesli when he hears about this one. It’s going to be the battle of the brands – Virgin versus Sky,” an unnamed banker told the UK’s Sunday Telegraph newspaper on the weekend.

It’s understood Virgin Mobile will be making an official announcement early this week.

Closer to home, Branson is battling it out with NSW businesswoman Gabrielle Maas, who is offering Internet services under the name of Virgin Star.

Branson’s Virgin Enterprises, which is demanding Maas stop trading under the Virgin name for fear consumers will mistake Virgin Star for another of Branson’s services, took the fight to the Federal Court.

A ruling is yet to be made, but we’re sure the other Australian businesses trading with a Virgin moniker (Maas says there are 10 out there) are keeping a close eye on the case.

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