Virgin.net walks out on NTL

NTL's telephony customers will no longer be able to use Virgin.net's free ISP service - even though Virgin.net is part owned by NTL.

The move is even more ironic given that NTL is currently looking for ISP partners.

Virgin.net is ending all 5,500 subscriptions to a trial unmetered internet access product called Stop the Clock, forcing many users to switch to an alternative ISP.

Virgin.net wants all Stop the Clock customers to switch to its alternative unmetered internet access service using BT's Friaco product.

For Virgin.net customers who have BT as a telephone provider, the switch to Friaco is not much of a disruption, just a new telephone number for their modem to dial.

But customers who used to use Virgin for the internet and NTL for their telephone calls can't use Friaco - they either have to move to a pay-as-you-go service or install a BT phone line.

The timing of the move is interesting as it comes shortly after a story appeared in the Financial Times which claimed that NTL had been in talks with Freeserve and AOL about the possibility of offering them a wholesale broadband internet service.

It's no secret that NTL is up to its eyeballs in debt. Signing a deal with Freeserve, AOL or even Virgin would make good sense. It would allow NTL to increase its network usage and boost its revenues while someone else invested in sales, marketing and customer care (which isn't NTL's strongest suit).

The logical choice of consumer brand for NTL to team up with might well be Virgin.net, as it already owns 49 per cent of Virgin.net and once tried to buy the whole lot.

Instead, things are moving in the opposite direction. Virgin.net has in effect chosen to ditch existing unmetered customers rather than work with NTL to develop a new service. No new Virgin/NTL service is in the pipeline, we are told.

If this kind of logic reflects what's going on at NTL headquarters, then the company is in a worse state than we thought, and the likelihood of a deal with AOL or Freeserve in the immediate future must be pretty small.

However, there could be method in its madness. If NTL was looking for a partner to improve its customer service, it would hardly want to choose Virgin.net, whose customer service is provided by... NTL!