NTL

This article discusses the cable provider NTL Incorporated. For other uses of NTL'' see NTL (disambiguation)

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).

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%.

History

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.

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.

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 following shortly after.

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 â€" 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 Â£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 Â£1.445 billion by July 2005, with an operating cashflow of Â£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 dial-up ISP virgin.net.

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 â‚¬825 million from the Irish government) to UGC Europe (since renamed Liberty Global Europe) for â‚¬325 million â€" this after having spent in excess of â‚¬100 million on network infrastructure (i.e. making a gross loss of â‚¬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 March 2006 Liberty continues to use the NTL brand in Ireland, but pundits predict that UPC will be eventually replace the branding.

NTL/Telewest merger

From late 2003 discussions commenced on a merger between Telewest and NTL. Thanks to their geographically different areas NTL and Telewest co-operated in the past, such as directing potential customers who are outside their own 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 it was 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 was completed on March 3, 2006, making the merged company the UK's largest cable provider with more than 90% of the market. Once this was completed, 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. These two operations will gradually be merged and likely be re-branded under the Virgin name (see below).

Virgin Mobile merger

In December 2005 NTL and Virgin Mobile announced that talks had taken place regarding a merger. The proposed new company would adopt Virgin Group-compatible branding. A merger of Virgin and NTL would create the UK's first 'quadruple play' media company, bringing together television, Internet broadband, mobile-phone and fixed-line phone services. Reports suggested that under the proposed deal, Virgin owner Sir Richard Branson planned to swap his controlling 72% stake in Virgin Mobile for a 14% holding in NTL, which would make the billionaire entrepreneur the biggest single shareholder in the combined group.

Virgin Mobile's independent directors rejected the original bid of Â£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 Â£961m (372p per share).

On 4 April 2006, NTL Incorporated announced a Â£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 10.6% shareholder.

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 1 Mbit/s, 4 Mbit/s and 10 Mbit/s. NTL currently offers Telewest-branded cable users speeds of 2 Mbit/s, 4 Mbit/s and 10 Mbit/s. The NTL services offer upstream bandwidths of 100kbit/s, 400kbit/s and 512kbit/s respectively on the 1Mbit/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.

These broadband services do not have usage caps, but a fair-use policy does apply, in accordance with standard broadband-service practice. NTL have acquired a large number of Allot NetEnforcer traffic-shaping appliances and have announced their intention to use these to control upstream use of P2P applications.

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.

As of 2006 the NTL Digital Network has started to test Broadband TV, a new interactive service, after one year in development. The service allows for NTL Digital TV customers 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.

Channels

ntl offers three different digital-channel arrangements, and many more for analogue customers. For a full list see the Digital Spy website.

NTL: Encyclopedia BETA

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