Thursday, June 26, 2008

That C&W takeover of THUS Telecom people are talking about

As the 30th June deadline looms and THUS Management remain coy about their plans, we take a look at how a combined CW/THUS entity would address the IP services market in the UK.
In this graph we see the customers of each player by turnover. The first thing that strikes you is that where CW is weaker than the market average (0 on the 'Y' axis), THUS is stronger and vice-versa. A combined entity would have a significant increase in market strength across the whole business IP services market.

CWs undeniable success in controlling costs, reducing unplanned churn, and bringing its customer base back to those it finds most profitable to serve; has led to a fall in its 'overall' market strength. It's position in the profitable £2m-£20m Turnover bracket is particularly effected, see below.
For CW being able to leverage THUS' position amongst this group could quickly address the concerns that some analysts recently expressed that CW has pulled back too far, too fast.

Given that unlike India, Big Vision in UK Telco sadly took a pasting in the 2001 crash, What is the Pluthero vision that is big enough to accommodate the acquisition of THUS?

THUS is a strong company, has a lot of potentially profitable customers, a UK wide NextGen powered network, and growing reputation for delivering value to customers & shareholders. CW, is a global brand, has a focus on increasing profit per customer, and access to a global network which makes them increasingly attractive to multinationals transitioning from legacy to all IP NextGen services.

My opinion is that both companies are growing in strength and left to it would thrive independently; together the potential is extraordinary.

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