NTL
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- This article discusses the cable provider NTL Incorporated. For other uses of NTL see NTL (disambiguation)
NTL Incorporated
<tr><td colspan="2" style="text-align:center; padding:16px 0 16px 0;"> | |
| Type | Public: (NASDAQ: NTLI) |
|---|---|
| Founded | 1992 |
| Headquarters | Image:Flag of the United States.svg Corporate: New York, NY, USA Image:Flag of the United Kingdom.svg Operational: Hook, Hampshire, UK <tr><th style="text-align:right; padding-right:0.75em;">Key people</th><td>James Mooney, Chairman |
NTL Incorporated, a U.S.-listed British company, provides cable services (Internet, telephone and television). While NTL has its headquarters in New York City, the company's activities focus heavily on the United Kingdom, with operational headquarters in Hook, Hampshire. The company formed as the result of the 2006 merger of the UK's two major cable services companies, NTL Holdings and Telewest Global. The combined company dominates cable operations in the UK. It also owns Virgin Mobile (UK) and Virgin.net, which supplies Internet services via broadband and dial-up.
NTL competes with the Sky Digital platform in the pay-television market, and against BT (and BT-provided ADSL services) in the voice-telephone and broadband markets. NTL also produces content through its Flextech subsidiary. In 2005 residential services generated 78% of NTL's revenue, and business services 22%.
NTL announced on 8 November 2006 that it would rebrand as Virgin Media in early 2007. <ref>Reuters - NTL to rebrand as Virgin Media early next year. Retrieved 8 November 2006.</ref> <ref>New Media Age - NTL:Telewest/Virgin Mobile re-brand as Virgin Media. Retrieved 8 November 2006.</ref>
On 9 November 2006, it confirmed media reports that it had approached commercial television broadcaster ITV plc about a possible merger. <ref>www.digitalspy.co.uk on ITV plc and NTL possible merger</ref>
Contents |
[edit] History
[edit] The early 1990s
TCI and US West founded Telewest in 1992 as a joint venture named Telewest Communications.
Barclay Knapp and George Blumenthal, the founders of the cellular network company Cellular Communications, Inc. (sold to Airtouch in 1996) established NTL Holdings in 1993 as International CableTel. They founded CableTel in order 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.
[edit] Adoption of the name NTL
In 1996 CableTel acquired National Transcommunications Limited (NTL), the privatised UK Independent Broadcasting Authority transmission-network. In 1998 CableTel adopted "NTL" as its new name.
[edit] Expansion and difficulties
The company spent heavily: both on expanding its network and on acquiring rivals. 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. The company began to expand outside the UK in 2000, buying into markets on continental Europe and in Ireland.
The collapse of the telecommunications markets from mid-2000 dealt a serious blow to the company. This, combined with NTL's rapid acquisition of local cable-operators, led to severe integration problems. NTL, struggling to cope with rapid expansion and suffering from significant customer-service problems, then had to contend with the setting up in November 2002 of one of the UK's first consumer lobby-groups, nthellworld, with ntl:hell following shortly after.
[edit] Bankruptcy protection and after
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 of 2004 NTL sold their 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.
NTL had cut its debt to £1.445 billion by July 2005, 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 Autumn 2004, NTL purchased the remaining shares of the Internet service provider (ISP) virgin.net, originally a joint venture with Sir Richard Branson's Virgin Group.
In January 2005, NTL started rolling out Video On Demand. With content selected by NTL, this service covers most genres including music videos, children's programming and adult entertainment. This is an extension to the basic 'pay per view' services the company offered for Film and Sport content, and the new service allows 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 (since renamed Liberty Global Europe) for €325 million — this after having spent in excess of €100 million on network infrastructure (i.e. making a gross loss of €500 million - more than 50% - over what they paid). MS Irish Cable Holdings, a subsidiary of Morgan Stanley, held the stake on UGC's behalf, until the deal received regulatory clearance. In December 2005 the regulatory clearance came through and NTL Ireland became a wholly owned subsidiary of Liberty Global Europe. As of September 2006 Liberty continues to use the NTL brand in Ireland, but analysts predict that UPC will eventually replace the branding.
[edit] 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 directing potential customers living outside their respective areas. On October 3, 2005, NTL announced a USD$6 billion purchase of Telewest, creating 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 merger took place on March 3, 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 Incorporated, 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.
NTL continues to trade as two individual operations, ntl and Telewest, providing different services. The company plans to merge the two operations gradually, and will re-brand them under the "Virgin Media " name in early 2007(see below).
[edit] 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 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 has accepted a mix of shares and cash, making him a 10.7% shareholder of the combined company. The deal includes a 30-year exclusive branding agreement that will see NTL adopt the Virgin name across its consumer operations as it merges operations with its current Telewest brand.
The takeover completed on 4 July 2006, leaving Virgin as a 10.5% shareholder. The merger of Virgin and NTL created the UK's first 'quadruple play' media company, bringing together television, Internet broadband, mobile-phone and fixed-line phone services. On 8 November NTL announced it would change its name to Virgin Media Plc.
[edit] Private Equity Bid
On August 16 2006, The Times reported that the ntl Incorporated group (comprising NTL, Telewest and Virgin Mobile) could become the subject of a £10bn-takeover-bid from a private-equity firm consortium made up of Kohlberg Kravis Roberts, Bain, Cinven, Blackstone and Providence Private Equity.
The £10bn figure would include £6bn worth of debt already on the NTL balance-sheet. Additional new banking facilities would probably fund the private-equity bid. Rumor suggested that the consortium might pay around $30 per share for the NASDAQ USA-listed holding-company.
Any bid would need the backing of Sir Richard Branson's Virgin Entertainment Investment Holdings Limited (part of the Virgin Group Limited), which holds a 10.5% stake in NTL.
As of 16 August 2006 the market expected that the formal takeover approach could come in the next fortnight.
However, no bid materialised, and the market now doubts whether such a bid will take place.
[edit] ITV merger
On Thursday, 9 November 2006, NTL announced that it had approached commercial television broadcaster ITV about a proposed merger [1], after a similar announcement by ITV . BSkyB effectively blocked the merger when it bought 17.9% of ITV.
[edit] NTL Broadband
NTL offers broadband Internet access connections through cable and via ADSL. The cable service predominates, provided through SACMs (Stand-alone cable modems) and STBs (Set-top boxes).
Current download speeds offered to ntl-branded cable users include 2 Mbit/s, 4 Mbit/s and 10 Mbit/s. The NTL services offer upstream bandwidths of 200kbit/s, 400kbit/s and 512kbit/s respectively on the 2Mbit/s, 4Mbit/s and 10Mbit/s services. Telewest-branded services offer an upstream of 256kbit/s on their 2Mbit/s service and 384kbit/s on both their 4Mbit and 10Mbit services. NTL has started trialing 20Mbit/s, and has upgraded some 10Mbit/s subscribers to this speed. The 20Mbit/s service reportedly supports 768Kbit/s upstream, though some users have reported seeing upstream speeds of 1 Mbit/s.
Before the deployment of modems became standard, most subscribers used STBs. The STBs proved highly problematic, exhibiting two major flaws. Firstly, large numbers of connections (e.g. with P2P software) would cause the connection to slow down and eventually freeze the modem part of the STB (also required for interactive TV services, which suffered a similar effect when downloading). Customers in these circumstances had to re-boot the STB. Secondly, an in-use modem made the TV part of the box slow and unresponsive, for example making it extremely difficult to change channel using the remote. Speculation suggests that older model STBs (such as those made by Pace) did not have the speed to handle broadband access. Newer Samsung boxes have a better reputation; however, NTL now gives most subscribers, particularly those on the 4 and 10Mb services, SACMs.
The broadband services do not have a bandwidth-cap or a fair-usage policy, however NTL has introduced traffic-shaping. NTL initially denied the use of traffic-shaping, but has since admitted that it does "on occasion" use it. The exact meaning of this or frequency of use remains unclear. NTL's acceptable-use policy appears more liberal than that of most ISPs in the UK.
For customers who do not live in cabled areas, NTL offers an ADSL Broadband service through BT landlines under the Virgin.net brand. NTL supplies Virgin.net users with an ADSL modem for their PC, and they receive up to 8 Mbit/s downstream and 400 kbit/s upstream. The service offers various usage-allowances depending on which package a user takes. Prior to this NTL offered the NTL Freedom package, a fixed 1 Mbit/s downstream and 256 kbit/s upstream service with no limit on usage. NTL Freedom also bundled phone-services via CPS (Carrier Pre-Select) to users of their ADSL Broadband service. NTL has currently started conducting trials of a 100Mbit broadband service. No-one knows yet whether or when NTL will make this service available to all its customers.
After a year of development, the NTL Digital Network has started to test Broadband TV, a new interactive service, branded "NTL On demand". This service allows for customers of NTL Digital television to have access to interactive services that equal or out-perform those available on Sky, as the service runs from servers at the customer's local head-end, therefore bypassing the need for the customer's set-top box to do any of the hard work. It also removes the need to pre-record many programmes, as the broadcaster automatically stores content on NTL's servers. NTL Digital makes available to subscribers in enabled areas a number of shows for viewing on-demand for up to a week after their first broadcast. Customers may download other television-shows, films and music videos, mostly for an additional fee.
NTL has confirmed that it intends to launch a high-definition service in autumn 2006, based on the service currently offered by Telewest. The service will use an upgraded set-top-box, with three tuners and a hard disk for recording.
[edit] Channels
NTL offers three different digital channel arrangements, and many more for analogue customers.
On 1 September 2006 NTL introduced the FreeTV digital package to its telephone subscribers free of charge. However, value-pack customers lose their value-pack discounts if they integrate the FreeTV deal into their existing packages.
In September 2006, NTL changed the channel numbers for its subscribers in order to make them consistent. The new channel-numbering system imitated that of Telewest. Before the change, NTL used two different sets of numbers on its two platforms referred to as Langley and Bromley (the ex-Cable & Wireless platform). For example, different subscribers to ITV4 (now on ch 117 on all platforms) could find it on channel 122 (Langley), channel 15 (Bromley) or channel 117 (Telewest). The NTL website has a downloadable full list of channel-numbers.
[edit] See also
[edit] References
<references/>
[edit] External links
- NTL
- Telewest
- NTL World
- NTL Home
- Virgin Mobile UK
- ntl:hell - ntl: Community forum
- Chetnet - ntl:Telewest independent broadband support forum
- Cable Forum - ntl:Telewest Community forum
- NTL share price
- Virgin.net Broadband
- Private-equity bid article
- The European Audiovisual Observatory
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Categories: Companies listed on NASDAQ | Fortune 1000 | Internet service providers of the United Kingdom | Television networks | Telecommunications companies | Cable television companies | British television | Companies established in 1992 | Media companies of the United Kingdom | Telecommunication companies of the United Kingdom | Companies without an unabbreviated name | Flextech
