That's the view of price-comparison service Firsthelpline.com's director, Aamir Baloch, who thinks it could lead to improved customer support and better offers for punters.

Private equity firm Carlyle has tabled a bid of around £5.5 billion for Virgin Media, formerly ntl:Telewest, and other private equity groups are also said to be interested in the company.

Virgin Media confirmed that it had received an offer.

"The company has not engaged in negotiations with the offeror. The proposal also states that it will be withdrawn if its terms are publicly disclosed. However, there is no assurance that any transaction will occur or, if so, at what price," Virgin Media said in a statement.

Baloch said that the rebranding of the company had not been as sucessful as it could have been and that Virgin Media wasn't making the expected impact in the market.

"Virgin Media's merging and rebrand has been a mixed move for the company and its consumers. Despite providing communications services through a superior technology, it is still struggling to fend off competition from the market leaders," said Baloch.

The biggest battle Virgin Media has faced since it rebranded has been with Sky, concerning a disputed carriage deal that ultimately saw Virgin lose channels such as Sky One.

Mike Cansfield of analyst company Ovum suggested that Virgin Media had made a hash of the dispute.

"Judging by its results so far, progress has been slow. The board has a lot of issues to deal with and The Carlyle Group thinks it can do a better job," said Cansfield.

Baloch thinks new owners may bring an injection of cash which could help the company find a better alternative or perhaps re-open negotiations with Sky.

"Renewed investment should mean the company can come back stronger, with improved customer service and media services, helping it to take on Sky and BT to become a strong contender in the market," Baloch said.

But some customers may choose to leave Virgin Media as a result of the proposed takeover.

"The short-term uncertainty and lack of customer focus may still lead to customer defections," said Baloch.

However, Jason Lloyd of moneysupermarket.com offered an alternative future for Virgin Media customers.

"The investors may look to cut costs, maximise efficiencies and squeeze every last penny from customers. Subscribers might also see service levels dipping as private equity groups have often sacrificed customer service to reduce costs," Lloyd said.

Ovum's Cansfield sounded a warning to the Carlyle Group, saying that the deal was far from being signed and sealed.

"Virgin Media has asked Goldman Sachs to act on its behalf and conduct an auction for the business. So Carlyle may not have it all its way – a bidding war amongst private equity firms may ensue," he said.

Virgin Media provides TV, broadband, landline and mobile telephone services. It also has a fibre-optic cable network that can potentially reach 50 per cent of the UK population.

www.firsthelpline.com
www.virginmedia.com
www.ovum.com

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