Carphone Warehouse makes two buys to consolidate telecoms operations

Carphone Warehouse makes two buys to consolidate telecoms operations

	Published : Mon, 19 Dec 2005 14:05 By : Andrew Stead Print this Story

LONDON: Mobile phones company Carphone Warehouse Group has acquired the telecoms unit of British energy company Centrica Plc., Onetel, for 154 million pounds. The London-based company will pay 132 million pounds initially -- comprising 94.9 million pounds for Onetel's residential and business operations and 37.1. million pounds towards a contract under which Centrica will recruit customers for it through the British Gas operations in the next three years.

It will pay an additional 22.2 million pounds over the next three years for the customer base brought through British Gas.

The transaction will be funded through bank borrowings.

Carphone Warehouse said it will merge Onetel with its TalkTalk fixed line business started two years ago. Onetel has around 1.6 million fixed line customers in Britain. It also offers mobile and Internet access and had sales of 280 million pounds in 2004 and 162 million in the first half of 2005.

In another deal finalised Monday, the company also bought the U.K. and Irish fixed line business of Swedish company Tele2 AB -- Tele2 UK Communications and Tele2 Telecommunications Services -- for a cash price of 8.7 million pounds. The unit has some 223,000 customers and it had posted nine months sales of 52 million euros and an EBITDA loss of 19 million euros.

Carphone Warehouse said it wants to become No1 alternative residential telecoms service provider in the U.K. "The acquisition of Onetel propels us clearly towards that position and gives us a substantial platform of profitable voice customers from which to launch our drive into the broadband market in 2006. It also allows major competitors to join forces in their bid to deliver improved value and service to residential customers."

Centrica intends to make use of the funds generated by the sale for investments in British and international energy markets. It said it will continue to offer telecoms services to its British Gas customers, for which it said it need not own Onetel.

It had put Onetel on the block in September, saying it wants to focus on its core energy and related home services operations.