CPW snaps up One-Tel and Tele-2

[3GScottishUser]

From Telegraph On-Line (19/12/2005):

Mobile phone retailer Carphone Warehouse has bought telecoms operator Onetel from Centrica for up to £154.2m to boost its residential fixed line business.

Under the deal £94.9m is being paid for Onetel’s business and Centrica has agreed to recruit new customers for Carphone from its British Gas business over the next three years for £10.1m.

Up to another £49.2m is payable if Centrica recruits an undisclosed number of customers. Centrica will receive £132m in cash when the deal is completed on December 31. Additional debt will be taken on by Carphone to finance the deal.

Onetel’s fixed line business has 1.1m customers which will be added to the 1.06m at TalkTalk, Carphone’s fixed line arm.

"Our goal is to become the number one alternative residential telecoms provider in the UK market," according to the Carphone statement. "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."

Carphone estimated the deal will boost pre-tax profit by £4m in the current financial year and by £20m in the next. For the six months to June Onetel made a £2m loss on turnover of £162.

Centrica said the sale of Onetel was part of its strategy of focusing on its core energy business.

Centrica chief executive Sir Roy Gardner said: "We will continue offering telecoms services to our British Gas customers but we don’t need to own Onetel to do this."

Carphone also bought Swedish company Tele2’s fixed line business in the UK and Ireland, which has 224,000 customers, for £8.5m. Another £2m of cash restructuring costs will also be taken on by Carphone.

Both Onetel and the Tele2’s UK and Ireland business will be rebranded under Carphone’s TalkTalk brand. After both deals TalkTalk will have 2.4m customers.

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