Butler bought 80% of Virgin in 2007 from French media company Lagardere, which had purchased the chain from Mr Branson's Virgin in 2001.

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In a competitive market occupied by the likes of Sky and Virgin, Mr Liassides said initially it would use the Cable and Wireless network to target the 3.2m student population.

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For Mr Fensom, neither BT nor Virgin offer "true next generation services" but he does hope that the Manchester example will offer proof to government that there are alternative ways of rolling out such networks.

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