Telephone and broadband operator, OneTel that has been on the market for around £300m, could make an entry into the satellite giant firm, British Sky Broadcasting.
Centrica, a Gas company in Britain, put up OneTel for sale when it went into administration owing to debts of £215m. It saw quite a few contenders queuing up for stakes, with chief executive at BSkyB, James Murdoch being one amongst them.
OneTel was partly owned by Murdoch’s brother, Lachlan earlier on and had 1.8m customers. Now that it was up for sale, more than a dozen of parties were seen considering a stake in this broadband company, with eminent ones being telecom firms, Cable & Wireless and Thus, equity groups like Apax Partners and Blackstone, along with Carphone Warehouse, whose chief executive Charles Dunstone spoke about his interest in the bid openly.
The industry, however, seemed the most taken aback this week when Sky chief Murdoch disclosed plans of a £1billion bond issue, with most experts deeming that it was a well planned move by Murdoch to make a foray into the thriving broadband business.
Meanwhile, the cable company merger between NTL and Tele-west could prove to be a little unsettling for Sky since both firms provide “triple play” of television, broadband as well as telephonic services. BT Group PLC is considering launching a similar video-on-demand service in 2006.
More importantly, Sky intends to invest around £100m to £200m in setting up equipment of its own in local telephone exchanges, i.e. local loop un-bundling, which would endow it with a direct line to users, thereby exceeding sidestepping BT. Currently, 8 million customers using Sky need to connect their set-top boxes with a telephone line to avail all interactive facilities at Sky.
An executive from the industry clearly stated, “There'll be a massive ruction with BT over this” in view of Sky launching equipment in BT local exchanges to offer its own internet services to homes that have well being dominated by the fixed-line giant.
Reports suggest that Sky is mainly eyeing broadband providers, Pipex and EasyNet as well as LLU TV outfit HomeChoice for acquisition to fund its £1bn venture. EasyNet could also have been chosen by Sky since it tied up with OneTel recently and had a good subscriber base of 70,000 people, while supplying mobile telephony facilities via wholesale agreements with Vodafone.
Stockbroker at Numis Securities, Paul Richards commented, “One of the key issues for Sky is how it reacts to the cable merger. The Murdochs tend to take the fight to the opposition.”
Nevertheless, Sky refused to comment or agree to any of the news floating around, as a spokesman said, “Sky has previously stated its intention to set the pace in media content and distribution. We don't comment on rumour and speculation. If Sky were to go ahead with a corporate bond issue, the proceeds would be used for general corporate purposes.”
Posted
on : Sat, 15 Oct 2005 05:45 GMT | Business News
By : Rob Davis
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