Post by: Forth Bridges on October 12, 2006, 10:40:56 pm
Carphone Warehouse has won the auction to buy the UK's third-largest internet provider, AOL UK.
BBC business editor Robert Peston said Carphone
Warehouse, owner of the TalkTalk broadband and phone offering, was
paying £370m for the operation.
AOL UK has 2.1 million customers across the country - 600,000 on dial-up and 1.5 million with broadband connections.
Carphone Warehouse, which runs the UK's largest chain of mobile phone stores, first moved into broadband in April.
News of the deal saw its shares rise 5% in morning trading in London.
The acquisition is transformational for our broadband business
It will be keeping the AOL name and the US firm's policy of charging customers.
Carphone Warehouse is funding the acquisition through an
extension of its existing debt facilities, and will keep AOL UK's
management and infrastructure.
AOL UK is being sold by its American parent company Time Warner.
Under the deal, the main part of AOL will continue to
manage advertising sales on AOL UK and also now on TalkTalk, through a
revenue-sharing agreement.
'New revenues'
Carphone Warehouse chief executive Charles Dunstone said the deal was "transformational for our broadband business".
We have accelerated our customer service recruitment plans and incurred additional wholesale broadband costs
"The joint development of AOL's already successful
audience platform will bring us new advertising and content revenues in
a proven and low risk manner," he added.
News of the deal came after Carphone Warehouse said
strong demand for its existing TalkTalk broadband offer meant it was
costing £20m more than originally expected.
The firm has had problems dealing with what it said was "unprecedented" consumer reaction to the service.
The UK's largest residential internet provider is
currently NTL, which has 2.9 million home customers, followed by BT on
2.2 million.
Carphone Warehouse is now in third place
Post by: smurfboy on October 12, 2006, 10:42:33 pm
Post by: Forth Bridges on October 12, 2006, 10:46:16 pm
Post by: smurfboy on October 12, 2006, 10:48:17 pm
Post by: Forth Bridges on October 12, 2006, 10:58:30 pm
Carphone knocked by Vodafone move
 Carphone is Europe's largest mobile phone retailer |
Shares in Carphone Warehouse have fallen by 12% after Vodafone said
the retailer would no longer sell its mobile phone contracts.
Vodafone is giving rival Phones4U an exclusive contract
to sell monthly phone subscriptions, an arrangement it currently shares
with Carphone.
Carphone, which will still sell pre-pay connections, said the change would not harm its financial position.
Vodafone said the move would reduce the amount it pays in commissions.
'Commercial logic'
The change in arrangements will come into effect on 30 November.
Carphone Warehouse has a larger retail presence than
Phones4U and the deal is a major boost for the latter, recently sold by
its founder John Caudwell to two private equity firms for £1.46bn.
About 40% of Vodafone's network connections are sold on a contract basis, typically over a year to 18 months.
Carphone Warehouse will continue to retain its core customer values of independence and impartiality
Vodafone said its decision to consolidate this business
with Phones4U reflected the fact that the bulk of these sales now took
place through its own stores and via the internet.
It was looking to save money on its remaining sales
through third-party retailers, a spokesman said, particularly as sale
commissions had risen sharply in recent years.
"There is a commercial logic to this," a spokesman said.
He added that Phones4U was popular with the 16-34 age group, a market which the firm was keen to target.
'Core values'
Vodafone would not comment on speculation that it was
also looking to consolidate sales of pre-paid connections with a single
retailer.
Carphone said it did not expect the lost contract to affect its profit expectations this year or in future years.
"Carphone Warehouse will continue to retain its core
customer values of independence and impartiality, and offer customers
the most appropriate network proposition," the retailer said.
Vodafone's decision comes a day after Carphone Warehouse revealed it had won the auction to buy AOL's UK business.
Carphone Warehouse has more than two and half million
phone customers through its Talk Talk service and competes with
Vodafone in France through its Virgin mobile phone join
Post by: loulou on October 14, 2006, 11:04:05 pm
Google are buying YouTube for £850m. To think it was started less than two years ago in a garage.
I read YouTube didn't receive any cash. They were supposedly given shares in Google.