Feeds

Vodafone: acquisitions in the face of heavy competition

Keep that pressure on

  • alert
  • submit to reddit

Secure remote control for conventional and virtual desktops

Vodafone continues to expand its presence in the UK mobile phone market with the acquisition of mobile services provider Project Telecom. Like other independent resellers, Project Telecom has already suffered due to intense price competition in the market - competition that is set to get even worse in the run up to Christmas.

The boards of Vodafone and Project Telecom have agreed on an offer of 70 pence in cash for each Project Telecom share. This is a 43% premium on its price on July 10, the day before Project Telecom revealed that it had been approached.

Essentially, Project Telecom provides mobile services to companies by buying minutes of airtime from network operators, and reselling them with handsets, as well as providing billing and other services. The Nottinghamshire-based company also supplies fixed-communication services through an agreement with Energis, the telecoms business spun out of National Grid.

This business model proved to be successful until April, when it was forced to issue a profit warning after it was hit by intense price competition from the mobile operators themselves, slower than expected growth, and a Competition Commission ruling on charges. The difficulties led to a strategic review of the business, which prompted the board to consider talks on a potential takeover. A number of other suitors, including BT, Orange, mmO2 and even Energis, are thought to have made approaches to the company.

Vodafone is also interested in buying out another mobile phone service provider, Singlepoint, in a deal thought to be worth more than £400 million. Singlepoint is a service provider like Project Telecom, but has 1.4 million customers as opposed to Project Telecom's 210,000 customers. About 90 per cent of its customers use the Vodafone network, and as with Project Telecom, Vodafone is keen to get direct access to the subscriber base. Last year, Singlepoint had estimated revenue of £500 million.

At the moment, the mobile phone market-place in the United Kingdom is incredibly competitive, after the heavy summer price cuts offered by 3G mobile operator "3" in its desperate attempt to acquire market share and consumer take-up of its 3G service. The pressure is expected to increase in the run-up to Christmas, especially now that BT plans to return to the mobile sector with its partner T-Mobile, while supermarket leader Tesco launches its own-brand service using the mmO2 network.

Source: Computerwire/Datamonitor

Recommended research: Reuters Business Insight, "Mobile Telecom Strategies in Europe: Identifying the Risk" (RBTC0048)

5 things you didn’t know about cloud backup

More from The Register

next story
UK fuzz want PINCODES on ALL mobile phones
Met Police calls for mandatory passwords on all new mobes
Canadian ISP Shaw falls over with 'routing' sickness
How sure are you of cloud computing now?
Don't call it throttling: Ericsson 'priority' tech gives users their own slice of spectrum
Actually it's a nifty trick - at least you'll pay for what you get
Three floats Jolla in Hong Kong: Says Sailfish is '3rd option'
Network throws hat into ring with Linux-powered handsets
Fifteen zero days found in hacker router comp romp
Four routers rooted in SOHOpelessly Broken challenge
New Sprint CEO says he will lower axe on staff – but prices come first
'Very disruptive' new rates to be revealed next week
PwC says US biz lagging in Internet of Things
Grass is greener in Asia, say the sensors
Ofcom sees RISE OF THE MACHINE-to-machine cell comms
Study spots 9% growth in IoT m2m mobile data connections
O2 vs Vodafone: Mobe firms grab for GCHQ, gov.uk security badge
No, the spooks love US best, say rival firms
Ancient pager tech SMS: It works, it's fab, but wow, get a load of that incoming SPAM
Networks' main issue: they don't know how it works, says expert
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.