Cloud Net Blog

Telecoms, Where Are They Now - Who Bought Whom?

In the telecoms world, knowing who was bought by whom is almost a mark of knowledge and experience, so if you speak to a telecoms professional they “know” when you say ‘Bulldog’ you mean ‘the company bought by Cable and Wireless’.

Until now there hasn’t been a simple list that you could use to pull the wool over their eyes and appear to be a true (telecoms) professional. Of course if you are a true professional you might not agree with my selection of memorable takeovers, so please let me know.

So here is my instant guide to who bought whom and when:

May 1998	Demon bought by Thus
1999	Racal bought by Global Crossing
January 2002	Global Crossing, by Hutchison Whampoa and Singapore Technologies Telemedia
November 2002	Opal Telecommunications bought by The Carphone Warehouse
March 2004	Uniworld Communications bought by Gamma Communications
May 2004	Bulldog bought by Cable & Wireless
August 2005	Energis bought by Cable and Wireless from administration
December 2005	Tele2, by The Carphone Warehouse
March 2006	Telewest, by NTL, now called Virgin Media
June 2006	Be Unlimited bought by O2
July 2006	Toucan bought by Pipex
July 2006	Bulldog (retail customer base) bought by  Pipex
August 2006	Video Networks bought by Tiscali
October 2006	AOL UK bought by Carphone Warehouse
July 2007	Pipex bought by Tiscali
June 2008	Thus bought by Cable and Wireless
June 2009	4Com customers bought by Daisy Group
July 2009	Tiscali bought by Carphone Warehouse
August 2009	Eurotel bought by Daisy Group
August 2009	Redstone Telecom telecom and mobile divisions bought by Daisy Group
June 2010	Kingston Communications changed name to KC

Why Are Telecoms Shares So Cheap?

Telecoms companies in the 1990s used to be regarded as high flying tech stocks. However, many have been badly run and most destroyed huge amounts of value by overpaying for acquisitions at the height of the dotcom boom. Added to these factors are rising capital expenditure costs, stricter regulation and new technologies such as VoIP destroying margins for traditional telecoms companies.

If that’s not enough new fibre networks represent another drain on company finances since they require heavy investment to ensure that these companies keep hold of their competitive positions.

That is why for example BT is doing all it can to make its cash position look more attractive to investors: from altering billing dates, to altering the cheap period for calls to simply raising prices.

It’s thanks to these billing moves that companies such as Cloud Net, which offer high quality VoIP business phone systems, become more appealing to small businesses looking for straightforward pricing.

Regulation has controlled many aspects of telecoms profits for years and the government can be seen to be improving the situation for consumers by leaning more heavily on the companies. The cuts imposed recently on mobile termination rates are a case in point.

Cable and Wireless recently announced a profit shortfall because of a reduction in government spending. The share price reacted with a 25% fall.

Brokers are regarding telecoms as utility companies sharing their high borrowings with strong cash flows which enable the debts to be serviced. However, regarding them as utilities does mean they are not stocks that need to be held in a portfolio. Indeed as a utility stock their profits are not as guaranteed as say, an electricity company. After all you need light at home you don't need to make that phone call in the same way.

The technology that drives the internet is both a blessing and a curse for the Telco’s. On the one hand the ever increasing demand for data is a positive thing requiring ever more fibre but on the other it does need more capital investment. The charging models are complex and there is a fragmentation of the network with some companies cherry picking parts of the network to develop and sell, which puts pressure on the large incumbents.

The bottom line is will I be investing in BT, Cable and Wireless, Talk Talk or Vodafone in the near future? The answer is that although the stocks are cheap - they are cheap for a reason.

Written by David Hill, Chairman, Cloud Net

BT vs Virgin Media vs Cable and Wireless vs Talk Talk

The UK landline market place has changed more radically in the last 2 months than ever before. For once BT the largest player hasn't reported a major change, however the others of the big 4, Virgin Media, Cable and Wireless and Talk Talk have had major events.

In date order:

Virgin Media

NTL: Telewest as a brand was unceremoniously dumped by Virgin as they rebranded their business offering to Virgin Media Business on February the 11th. That rebranding exercise seems to consist of deleting all references to NTL Telewest on all documents on their web site and replacing them with Virgin Media Business.

Mark Heraghty, Managing Director of Virgin Media Business, said: "We have big ambitions for Virgin Media Business. Delivering fabulous fundamentals - great service, good quality and value for money - is at the heart of our strategy. Over the last three years we've invested heavily to put the building blocks in place, which means we're more than fit to wear the Virgin badge."

Cable and Wireless Worldwide

Then on March 26 Cable and Wireless split in two and Cable and Wireless Worldwide were born. It is to concentrate on The Worldwide business (formerly Europe, Asia & US) specialising in offering communications services IP, data, voice and hosting to large enterprise, reseller and carrier customers. It operates globally, with core markets in UK, Asia and EMEA, and provides connectivity in 153 countries.

Talk Talk

Then on March 29 Talk Talk was admitted to the UK stock market following the demerger with Car Phone Warehouse. Their business offering is still branded as Opal (watch this space). They say Opal has a 15 year history and is well established within the SME market, currently offering voice, data services, telephony systems and mobile services to business customers in the UK.

Opal has 3 distinct channels to market, Small Business (Connect channel) - managing businesses up to 50 employees / customers, Large business and public sector (Consult channel) - managing organisations over 50 employees and all the way up to the FTSE 100 and resellers and dealers (Partner channel) - from dealers up to Systems Integrators

Financials

So let us compare their financials (all figures in £ millions, except employee numbers)

	BT	Virgin Media	C W W	Talk Talk
Year end	Mar-09	Dec-09	Mar-09	Mar-10
Turnover (m £s approx)	£21,390	£3,804	£3,646	£1,385
Profit Before Tax	-£134	-£338	£233	£115
Market Capitalisation current	£9,675	£4,164	£2,414	£1,235
Employees	111,000	11,000	13,000	1,500
Debt	£12,365	£5,934	£832	£862

The market capitalisations (number of shares times share price) are interesting with the markets clearly taking into account differing factors.

VoIP

It is interesting that none seem to be placing a great deal of emphasis on the hosted VoiP revolution that is headed down the tracks toward them. It will be interesting to see just how they react to when they see companies like Cloud Net taking an ever increasing proportion of their business systems revenues.

Written by David Hill, Chairman of Cloud Net.

A whole new world of acronyms at the Cable And Wireless Site - what do they mean?

 

Reading about the newly demerged Cable and Wireless Worldwide - also known as C&W Worldwide I was fascinated to learn just what their new plans were.

They believe that innovation in the ‘cloud' will continue to help the CIO address the five key challenges they face.

What are those challenges? C&W think they are

1) ELEVATE THE IT-BUSINESS RELATIONSHIP
Projects that focus on improving IT measurement and business impact with visible and understood value.

2) DRIVE SMARTER TECHNOLOGY INVESTMENTS
Improve bottom line and business performance by finding alternatives to traditional sourcing methods.

3) CREATE A CULTURE OF PERFORMANCE AND VALUE IN IT
Help to deliver a vision that focuses on the right objectives and the significant impact that IT has on the business success.

4) SHAPE IT FOR TODAY & TOMORROW
Implement the right structure and processes to support the overall strategic plan.

5) PREPARE FOR THE FUTURE
Using skills and resources more effectively will enable better longer term strategic planning in preparation for the future.

So let me try and translate for those who like their English in English.

The 5 chief challenges summarised - do good IT projects and measure them.

I know it is tough to talk about technical matters in words that we can all understand but at Cloud Net we do try and make it simple.

So as a service to those who may also want to read the Cable and Wireless Site here are a few more of their acronyms translated:

FMC - Fixed mobile convergence
MVC - Managed Video Conferencing
MSP - Multi service platform - There are lots of other meanings as well eg managed service provider
APM - Application Performance Manager
Blobserver - is the piece of software that serves PDF's to viewers on their site - a prize of a bottle of Scotch to anyone who is really into acronyms and can translate this one.

Written by David Hill Chairman Cloud Net

Source
https://www.my-cw-portal.com/cs/BlobServer?blobcol=urluploaddocument&blobtable=CWDocument&blobkey=id&blobwhere=1258634270979&blobheader=application%2Fpdf&blobnocache=true