Carphone Warehouse buys Opal Telecom

The Carphone Warehouse is to offer fixed-line telco services to its high street customers following its acquisition of Opal Telecom.

The deal will cost The Carphone Warehouse £65m in shares and cash with the option of a further £18m possibly being payable over the next two years.

For The Carphone Warehouse, the deal offers the chance to build a fixed-line telephony business that, if successful, would generate recurring and regular revenue.

Recent changes in the Carrier Pre-Select (CPS) market has made it easier for customers to switch operators while maintaining their BT line. The acquisition of Opal gives The Carphone Warehouse with the opportunity to offer domestic fixed line voice services through its existing network of shops.

CPS allows consumers to have their calls automatically carried by the phone company of their choice using their BT line without the need to dial extra digits or the need for an autodialler box.

Opal was founded in 1995 and has operations in Warrington, London and the West Midlands. It offers fixed-line voice services primarily to the corporate and small and medium sized enterprise (SME) market in the UK.

It has 20,000 corporate customers and currently bills over 200 million switched minutes per month.

For the year ended 31 December 2001, Opal had a pre-tax profit before interest, tax and exceptionals of £3.2m. It made a pre-tax loss (after exceptional items) of £4.5m and net liabilities of £10.7m.

Revenue for the year ended 31 December 2001 was £92.3m.

In a statement Hans Snook, Chairman of The Carphone Warehouse, said: "The acquisition is a logical evolution of The Carphone Warehouse's strategy and enables us to bring Opal's services to the wide retail market as well as reinforcing their strength with corporate customers."

New of today's acquisition coincided with the publication of The Carphone Warehouse's interim results. The company reported a pre-tax profit of £12m for the six months to the end of September, up from £9.6m in the same period last year.

Turnover for H1 was £861.2m, up from £539.6m last year.

By mid morning shares in The Carphone Warehouse had fallen 10 per cent (9.25p) to 87.75p. ®