CABLE company NTL yesterday agreed a £962.4m takeover of Virgin Mobile to create the first company to offer cable television as well as mobile phone services.

NTL, which recently merged with Telewest, won the support of Sir Richard Branson and his Virgin Group, which own 71.2 per cent of the mobile phone operator.

The combined group will be branded under the Virgin name and will be the first in the UK to offer quad-play - cable TV, Internet access, fixed line and mobile phone services.

Virgin Mobile earlier rejected the bid from of NTL but backed the deal after Sir Richard offered to take less than other investors.

Minority shareholders of Virgin Mobile are being offered three takeover options from NTL, including 372p a share in cash. The deal represents a 19.6 per cent premium to the price of Virgin Mobile shares on the day before news of the takeover interest leaked out.

James Mooney, executive chairman of NTL, said: "It truly is a step-change transaction, not only for NTL, but for the media sector as a whole in the UK."

Under the terms of the deal, NTL has agreed an exclusive 30-year licence for the Virgin brand and believes this will help woo and retain more customers than before.

A combination of the two companies would be more likely to innovate and have more muscle when competing against BT and Vodafone, which dominate the UK telecoms market.

NTL expects revenues from each of its customers to rise if the quad-play offer proves popular. It has persuaded Virgin Mobile management to stay on and run the business.