Virgin enters quad-play market

Newly formed Virgin Media has thrown down the gauntlet to satellite broadcaster Sky by launching a range of television and telephone packages. 

Virgin Media, formed from the merger of Virgin Mobile and NTL Telewest, offers digital TV, broadband internet, fixed-line and mobile phone services. 

The new company plans to "shake up the industry and offer consumers quality, value, innovative products and outstanding customer service".

Regular quad-play packages will cost £20, £30 and £40 depending on features. Virgin Media's premium package includes 10Mbps broadband, a free TV, an HD-ready PVR, mobile phone and unlimited landline calls for £85 a month.

The company is also launching its own on-demand television channel on 20 February at cable channel 119.

Content will include free access to hit shows such as The West Wing, Little Britain, The OC, Nip/Tuck, Grey's Anatomy and CSI. 

"Virgin Media will be the UK consumer's company of choice to bring together all of the products, services and great content, such as Virgin Central, under a totally dedicated and national customer service banner," said Jim Mooney, chairman of Virgin Media.

The firm also plans to roll out its services into non-cable areas in 2007, extending its reach to more than 97 per cent of UK households.

Virgin Media will set up 15 high street Virgin Mobile stores in 2007 to sell its quad-play packages, as well as maintaining its existing promotional sites in over 100 UK shopping centres and using its 75 Virgin Mobile concessions in Virgin Megastores. 

However, the launch of the Virgin Media service has been hit by a number of measures from rival BSkyB.

The satellite broadcaster has refused to carry adverts for Virgin Media's service, and has cut revenues paid to Virgin Media's Flextech programming business for the channels it owns.

Flextech was receiving a 40p fee for every subscriber who signed up to Bravo, Living TV, Trouble and Challenge on Sky's service, but that figure has been slashed to just 10p.

It is estimated that the drop in revenue could cost Virgin Media up to £30m a year.