Carphone Warehouse buying AOL UK

[gav1810]

Carphone Warehouse buying AOL UK

BBC business editor Robert Peston said Carphone Warehouse, owner of the TalkTalk broadband and phone offering, was paying £370m for the operation.

AOL UK has 2.1 million customers across the country - 600,000 on dial-up and 1.5 million with broadband connections.

Carphone Warehouse, which runs the UK's largest chain of mobile phone stores, first moved into broadband in April.

The acquisition is transformational for our broadband business

Carphone Warehouse boss Charles Dunstone

It will be keeping the AOL name and the US firm's policy of charging customers.

Carphone Warehouse is funding the acquisition through an extension of its existing debt facilities, and will keep AOL UK's management and infrastructure.

AOL UK is being sold by its American parent company Time Warner.

Under the deal, the main part of AOL will continue to manage advertising sales on AOL UK and also now on TalkTalk, through a revenue-sharing agreement.

'New revenues'

Carphone Warehouse chief executive Charles Dunstone said the deal was "transformational for our broadband business".

"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.

News of the deal came after Carphone Warehouse said strong demand for its existing TalkTalk broadband offer meant it was costing £20m more than originally expected.

The firm has had problems dealing with what it said was "unprecedented" consumer reaction to the service.

The UK's largest residential internet provider is currently NTL, which has 2.9 million home customers, followed by BT on 2.2 million.

Carphone Warehouse is now in third place.

http://news.bbc.co.uk/1/hi/business/6039740.stm

[Alun]

Is that good news?

I'm currently with AOL and have been for a number of years. A lot of people slag them off, but I've never had a problem with them.

Conversely, my mate just got his TALK TALK broadband and has stated that it is *hit. And there customer service is non-exsistent. (sp)

Hope this isnt whats going to happen.....

[Kieron]

Just heard this. Not impressed.

If they start implementing download limits then I'm off.

[Snow_Man_UK]

I don't think much will change with your AOL service. Carphone Warehouse obviously need another revenue stream after the massive take up of their free broadband, hence the AOL buy out. Their step into broadband and fixed line telephone service has also been recently threatened by developments at SKY. So the lines are being drawn for a showdown.

As an aside I agree that Talktalk has a bad customer service reputation (I have used them for 18 months and my expereince is quite poor); however, without their impact in these markets we would all be paying alot more for these services.

[gav1810]

AOL UK finds a home in Carphone Warehouse
£370m, 2 million customers, one brand (slightly used)
By Bill Ray → More by this authorPublished Wednesday 11th October 2006 09:35 GMTGet The Register's new weekly newsletter for senior IT managers delivered to your inbox, click here. Carphone Warehouse has bought up AOL UK for £370m in cash, instantly bumping up its broadband customer base by 1.5 million.

The phone company will put £250m down with the rest to be paid on an installment plan over 18 months. Last month, the Times reported that BSkyB and Carphone Warehouse were battling it out for AOL UK, and now it seems that Carphone has won out and got itself over two million new subscribers, even if 600K of them are still using dial-up connections.

Assuming the deal gets regulatory approval it should be all completed by the end of the year, making Carphone Warehouse the third largest broadband provider in the UK, after NTL and BT.

Since offering its "free" broadband service, Carphone Warehouse has had 625,000 applications, and now has 421,000 connected subscribers, but this acquisition ups the ante considerably.

Equally interesting is a commercial agreement with AOL in relation to "the Audience business" which "provides Carphone Warehouse with a ready-made platform via which it can generate material incremental value from its large and growing customer base". So this deal isn't just about getting more customers, but about making some money from those customers too. ®

http://www.theregister.co.uk/2006/10...hone_buys_aol/