Carphone Warehouse have jumped into the big boy broadband rankings with its acquisition of the UK’s third-largest Internet provider, AOL UK.
Shelling out a cool £370m for the operation, Carphone Warehouse will inherit AOL’s 2.1 million UK customers, of which 600,000 are on dial-up, with the remaining 1.5 million using broadband connections. It’s four years ago that AOL announced their broadband pricing.
Under the deal, AOL will be keeping its (somewhat inappropriate) name – short for ‘America On Line’ – with the new owners retaining the US firm’s pricing policies.
(When AOL first hit the shores of Blighty, we did wonder if they’d change their name for the UK market, but we figured that UK On Line (UOL) sounds like someone being sick, and Britain On Line (BOL) would just invite the addition of ‘LOCKS.’)
Retaining AOL UK’s management and infrastructure, Carphone Warehouse said that it’s funding the acquisition of its shiny new toy through an extension of its existing debt facilities.
Although AOL UK is being sold by its American parent company Time Warner, the deal will see AOL continuing to provide co-branded portal, content and other audience services, as well as taking care of online advertising sales through a revenue-sharing agreement.
Carphone Warehouse head honcho Charles Dunstone announced that the deal was “transformational for our broadband business,” adding that they had “accelerated their customer service recruitment plans and incurred additional wholesale broadband costs.”
“The joint development of AOL’s already successful audience platform will bring us new advertising and content revenues in a proven and low risk manner,” he added.
Ol’Charlie boy’s been getting in the neck recently, after Carphone Warehouse’s TalkTalk service was the subject of a damning expose on the BBC’s Watchdog programme.
The show had been inundated with complaints after the company failed to deliver on its promise on ‘free’ broadband, and Dunstone has claimed that the strong demand has cost the company £20m more than originally expected.
The AOL deal sees the Carphone Warehouse crew slip into third place in the UK league table of residential Internet providers, with NTL the current leaders with 2.9 million home customers, followed by BT on 2.2 million.
With its bottom spanked raw by a damning expose on the BBC’s Watchdog programme, beleaguered TalkTalk boss Charles Dunstone has admitted that they screwed up the launch of their free broadband service. 
She soon learnt all about how useless their call centre was too, on one occasion spending 56 minutes 40 seconds waiting on the line. 
NTL, UK Cable provider, has announced a quad-play offering for £40. 
Bigging the service up and attempting to create extra excitement for the future, Neil Berkett, chief operating officer of ntl Telewest, enthused: “Quadplay demonstrates the unique power of the cable-Virgin Mobile union and this is just the beginning. Our new package represents unbeatable value while meeting a wide range of consumers’ entertainment and communication needs. 
Orange has launched, nay unleashed, the Unique phone, its first converged service using a single handset that connects via WLAN in the home and then switches to the regular mobile network when the user goes walkabout. 
So far, only the Motorola A910, the Nokia 6136 and the Samsung P200 can be used with the service, but more phones will be launched in 2007. 
THUS, the communications provider that owns the Demon brand has announced it has become the preferred supplier for HSBC in the UK. The contract is expected to be around £50m plus over 5 years. 
THUS also recently acquired Your Comms (a business telco based in the North of England) and Legend, a smallish ISP with a portfolio of VoIP products. Other acquisitions must be on their mind. 
In the general rush of all mobile phone companies desperately try not to get sidelined, Vodafone Italy have just announced a tie-up with Italian broadband provider, FastWeb. 
FastWeb bill themselves as “Italy’s leading alternative broadband provider,” and with under a million customers (874,300), they’ll benefit from having Vodafone selling their services from Vodafone shops around Italy as well as to their current 24m cellular customers. 
Sky has hit the pause button on delivering films (known by some as movies) and sport via their Sky By Broadband service, due to cracks in Microsoft’s Windows Media DRM software. 
Background
Market reaction
HomeChoice have agreed to be taken over ISP Tiscali in exchange for 11.5% of their new owner. 
HomeChoice has been settled on around 45,000 subscribers for quite a while now as they’ve been restricted to operating within London and some areas to its north. They just haven’t had the investment available to unbundle anymore exchanges beyond the 145 they have to spread their service. Their original expansion was hampered by the huge cost BT used to charge them for the Visionstream service they needed to run the service. 
By buying HomeChoice they’ll start with something they can build on, rather than having to start from scratch, giving them a time advantage. This is made very real by gaining 145 unbundled exchanges within London taking Tiscali to a total of 330 country-wide. 
A new survey by service comparison firm USwitch.com claims that Britain’s 10 million broadband users are spending an average of nearly a whole day online every single week. 
Internet telephony looks to be continuing its explosive growth, with one in eight people of those surveyed saying that they’d used net telephone calls using technology like VoIP software such as Skype.