11/10/2006

Carphone Warehouse buys AOL UK for £370m

Carphone Warehouse (CPW) has purchased the UK division of AOL for £370m. This may seem expensive (some £200+ per customer) but it's reasonably cheap for what they're getting. Since CPW have not yet unbundled many (if any) exchanges, being able to move their customers over and off IPStream is a huge saving for them (WLR + IPStream for 20 quid a month, they're losing lots of money per customer). AOL will already have booked to go into x00 more exchanges, while CPW starting from scratch will be
looking at an extended (time) roll-out, just because it takes so long for BT to get access.

Now CPW have 1.5m + 700K'ish broadband customers, it makes them the 3rd largest provider of broadband in the UK (BT Retail and NTL larger), plus they have 2m+ phone customers.

Though they now expect to make a big loss next year, they've got those customers away from BT and BT will find it difficult to get them back (assuming they fix their support/provisioning etc, which they are bound to do - actually purchasing AOL effectively gives them a working provisioning/CRM system).

LLU/broadband is all about scale and now CPW have it on a massive scale.

Tiscali UK are next to go (BSkyB/BT are though to be front runners though maybe CPW will also bid). Then the smaller providers will be swallowed up.
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