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The companies plan to offer a year of 8 Mbps broadband, for no additional cost, for customers that take one of Virgin Mobile's new SIM-only pay monthly tariffs.

According to Virgin, anyone joining Virgin Mobile's £15 or £30 a month SIM-only service will be eligible for 12 month's free broadband through Virgin.net. The broadband service will offer customers up to 8 Mbps download speeds capped at 6GB per month.

The offer also includes free set-up and a free broadband modem. Customers have three months to redeem the Virgin.net free broadband offer once they have joined Virgin Mobile.

The offer is only available until 31 October. Once the 21 month offer is over, customers will revert to Virgin.net's normal tariff that is currently £17.99 a month.

The parent company NTL, is also the target of speculation about a possible takeover bid only months after the company completed a merger with rival Telewest. An investment consortium comprising Providence Equity Partners, Blackstone, Kohlberg Kravis Roberts and Cinven has tabled an offer of £10bn for the firm. The offer is thought to have been rejected by the NTL board.