Shares in British Sky Broadcasting, the satellite broadcaster that is part of Rupert Murdoch's media empire, fell yesterday after NTL, the UK cable operator, launched a £817 million (€1.2 billion) bid for Virgin Mobile.

NTL's offer for the Virgin mobile phone brand raises the competitive threat to BSkyB as the rivals seek to become one-stop providers of television, internet access and telephony services to customers.

NTL is likely to have to wait until the end of the week before finding out whether Virgin Mobile's board will accept its bid.

Investors and analysts were sceptical that the offer, at 323p per share in cash, would be accepted. Virgin Mobile's shares closed almost 10 per cent higher at 342½p in London yesterday. BSkyB's fell 2.8 per cent to 491p.

NTL, which is in the process of merging with rival Telewest, said it had received "verbal assurances" from Sir Richard Branson's Virgin Group, which controls 72 per cent of Virgin Mobile, that, if its offer was successful, it would accept NTL shares in exchange for most of its stake.

The move is expected to lead to Sir Richard, one of Britain's best-known entrepreneurs and the man behind the Virgin airline, taking a 12-15 per cent stake in any enlarged group.

Simon Duffy, chief executive of NTL, wants to add Virgin Mobile to his company's offering of fixed-line telephony, TV and broadband as part of a strategy known as "quadruple play", which is designed to increase customer loyalty and provide an attractive distribution model for content.

NTL is also in discussions with Virgin Group about using the Virgin brand across all its services. The move is seen as a potential threat to rivals such as BSkyB and BT, the incumbent telecommunications operator, which is trying to branch out into broadband TV.

Bankers warned that the offer might not be enough to sweeten the deal for Virgin Mobile's minority shareholders.