BT to buy PlusNet; O2 reveals ambitious rollout plans

16 Nov 2006

BT Group has agreed to buy British ISP PlusNet for GBP67 million (USD126.8 million) in cash. The deal is a further sign of consolidation in the country’s broadband market: last month retailer Carphone Warehouse struck an agreement to buy Time Warner’s AOL internet business in the UK for GBP370 million. BT announced last week that its share of new broadband customers slipped to 22% in the three months ending September 2006, down from 25% in the previous quarter. The move for PlusNet could be seen as an attempt to stem that decline. The ISP, which will retain its brand name after the takeover, has approximately 200,000 customers, and in the year ended June 2006 it recorded revenues of GBP41 million and net income of GBP3.9 million.

In separate but related news, O2, which acquired ISP Be earlier this year, revealed to ZDNet UK yesterday that it now offers ADSL2+ services to 25% of the UK population, and that it will expand this to between 50% and 60% by the summer of 2007. O2 is currently in negotiations with BT Wholesale over a reseller agreement to cover the rest of the country, but this would be for standard broadband speeds of up to 8Mbps. Russ Shaw, capability and innovation director at the company, told ZDNet UK that the Be brand will be scrapped in the second quarter of next year in favour of something along the lines of ‘O2 Broadband’.

United Kingdom, BT Group (incl. Openreach), O2 UK