BT grabs £170m Redstone gig
BT Wholesale has won its first major deal to run a rival telco network. The deal is to run the voice network of cash-strapped Redstone Telecom, it's worth £ 170m, and it runs over six years. Twenty Redstone staff will transfer to BT under TUPE regulations.
It's unclear how much of this contract is new money - BT Wholesale says the deal protects and extends existing interconnect revenues with Redstone. Also, is BT Wholesale buying any equipment or facilities from Redstone?
Redstone Telecom will concentrate on developing its voice and data portfolio. The company has lost buckets of money over the last year or so, and was forced to implement a survival plan, the most notable element of which was a £22m rights issue. Redstone today said that net debt stood at £600K, compared with £6m in September, 2001.
Redstone ensures its continued survival with this contract - working capital and infrastructure investment needs are diminished. This means that it will not have to test the patience of its shareholders again with another rights issue. ®