Tuesday, October 10, 2006

Carphone Warehouse to acquire AOL Access in the UK

The Carphone Warehouse Group will acquire AOL's Internet access business in the UK for £370m ($688m) in cash. The deal includes AOL's Internet access customer base in the UK (2.1 million ISP customers) as well as the supporting management and infrastructure. This customer base includes approximately 1.5m broadband customers and 0.6m dial-up customers.

For its part, AOL will provide co-branded portal, content and other audience services and will manage the online advertising sales for Carphone Warehouse's combined broadband customer base through a revenue-sharing agreement.

Carphone Warehouse said the deal makes it the third largest broadband provider in the UK. Since 2003, Carphone Warehouse has been building a significant presence in the UK residential telecom market. Through organic growth and acquisition, it has grown to a base of 2.7m voice customers in under four years, giving it approximately 11% of the residential calling market.

In April 2006, Carphone Warehouse launched a major new initiative, offering free broadband to its voice customers, and has attracted 625,000 applications for this service over the last six months.

"The acquisition of AOL's UK Internet access business is transformational for our broadband business. This deal gives us significant scale to complement the rapid organic growth of our free broadband proposition. In addition, 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," said Charles Dunstone, CEO of Carphone Warehouse.


  • In September 2006, Telecom Italia agreed to acquire Time Warner's AOL Germany Internet access business for EUR 675 million ($870 million, Equity Value) in cash. Under the deal, AOL will provide co-branded audience services and content on a joint web portal for all of Telecom Italia's residential Internet access subscribers in Germany and will handle all online advertising sales. As of June 2006, AOL Germany, ranked second and third among German narrowband and broadband access providers, had 1.1 million broadband subscribers and approximately 1.3 million narrowband subscribers.

  • Also in September 2006, Neuf Cegetel agreed to acquire AOL's French Internet access business, including 500,000 broadband customers, and its AMSE operation, which manages AOL France's customer service operations (500 people), for EUR 288 million.

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