Richard Branson's Virgin Mobile Holdings PLC accepted a 962.4 million pound ($1.67 billion) offer from cable operator NTL Inc. (NTLI) on Tuesday, inking a deal that will create Britain's first powerful "quadruple-play" communications company.

Analysts said the agreement, which will allow the combined company to offer broadband, fixed-line and mobile telecommunications services as well as television under the Virgin brand, will set the standard for consolidation in the sector.

NTL President and Chief Executive Steve Burch said the purchase of Virgin would create a "unique force," adding that the company will eventually re-brand all of its cable TV and Internet services as Virgin. But he added that NTL's priority is to complete the integration of its acquisition of Telewest Global, the cable operator it bought in March.

NTL is giving Virgin Mobile shareholders a choice of three options, including a cash offer of 372 pence ($6.44) a share. Shareholders can also take 0.23245 NTL shares for each Virgin share, or 0.18596 NTL shares plus 67 pence ($1.17) in cash.

The cash offer represents a premium of 19.6 percent over Virgin Mobile's share price on Dec. 2, the last business day before NTL's first offer.

Virgin shares dipped 0.5 percent to 385 pence ($6.72) at midday on a lower overall London Stock Exchange. NTL shares closed Monday at $29.05 on the Nasdaq Stock Market.

Branson's Virgin Group, which holds 71 percent of Virgin Mobile, will retain a 10.7 percent holding in the merged business after opting to take a mixture of cash and shares.

NTL initially approached Virgin in December, revealing it was in talks about a bid worth 323 pence ($5.63) per share in cash and shares. Virgin Mobile rejected that offer, saying it undervalued the company. But Branson made it clear he expected the two companies to agree to a revised deal.

NTL, which has struggled with heavy debt burdens in the past owing to the cost of cable consolidation, said the deal includes a 30-year exclusive brand license with Branson's Virgin Enterprises Ltd.

David Thomson, an analyst with Bryan Garnier & Co. in London, said Branson's decision to take NTL shares was a vote of confidence in the quadruple-play strategy and was likely to put pressure on rival telecom operators to follow suit.

He added that the ability to license the Virgin brand would be a positive for NTL, which has had a reputation for "bad management and bad customer service."