There was a sense of optimism that the company could finally realise the potential of the UK cable industry after years of turmoil. In the late 1990s, NTL spent billions of pounds building a network of European cable assets but the collapse of the technology bubble in 2000 left it flailing under a massive debt pile and severe customer service problems. By 2002, the company was in a critical situation and entered Chapter 11 bankruptcy to reorganise a refinancing deal.
It converted $11bn worth of debt into shares and split its assets between its UK and Irish division and its European unit before emerging from seo australia bankruptcy in 2003. To distance itself from its troubled past, NTL:Telewest unveiled an ambitious plan to exploit its unique service offering and to rebrand under the Virgin Media banner. It spent a staggering £25m on its rebranding plan and £10m improving its customer service functions. But the companys progress was hampered by a war of words with the satellite television company BSkyB.
Sky, run by James Murdoch, scuppered Virgin Medias plans to buy ITV last December after buying a large stake in the terrestrial broadcaster. The two companies have since become embroiled in a dispute over carriage fees which has resulted in Sky channels being taken off the Virgin Media television platform. The battle came to the fore during Virgin Medias first-quarter results when Mr Burch warned the company could lose customers as a result of the dispute with Sky.
At the last count, Virgin Media had 3 million customers for its television services, 3.4 million broadband customers, 4.1 million fixed-line telephony customers and 4.5 million mobile users. Despite its large customer base, the company is seen as vulnerable to competition in each of its businesses and is understood to be keen to invest in new services, such as video-on-demand, while also speeding up its restructuring plan.