ntl contracts Ericsson for VoIP development; announces GBP600m finance package

11 Jul 2006

UK cable giant ntl Incorporated has selected Ericsson as technology and services partner to help develop its VoIP network. Under the five-year agreement Ericsson will help roll out residential VoIP services utilising its IMS platform, which has already been installed and is undergoing testing ahead of launch. The vendor will also be involved with upgrading ntl’s voice network from circuit-switched technology to IP using its IP-based Telephony Softswitch solution. Planning for the network transformation is currently underway and will involve the migration of circuits across the network from time-division multiplexing (TDM) technology to IP. The value of the deal was not disclosed.

In separate news, ntl says it will launch a GBP300 million (USD553 million) bond issue and secure a further GBP300 million in senior bank debt to help finance its merger with cable rival Telewest and MVNO Virgin Mobile. ntl consolidated its position as the UK’s largest cable operator with the merger of its nearest rival Telewest at the start of March 2006. It followed this up with the takeover of Virgin Mobile at the start of July. The structure of ntl’s financing for the mergers has undergone several changes. ntl initially planned to sell GBP1.8 billion of subordinated US bonds, but scrapped the plan in favour of additional bank debt in order to cut costs, and reducing the expected size of the bond issue to GBP600 million. The structure has again been adjusted to provide financing for ntl’s acquisition of Virgin Mobile.

United Kingdom, Virgin Media