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Shell Signs Deal to Gobble Post Office’s UK Broadband Division

Monday, February 1st, 2021 (5:26 pm) - Score 5,328
postoffice uk broadband

UK ISP and energy provider Shell Energy has this afternoon confirmed that they’ve reached an agreement to acquire some 465,000 phone and broadband customers from the Post Office’s telecoms division, for an undisclosed sum (previous estimates put the value of this deal at around £80m to £100m).

The situation arguably began last year (here) after the Post Office put out a Prior Information Notice (PIN), which sought suppliers for a “range of goods and services in order to continue to provide telecommunications services” to consumers (prior to this they held a managed service agreement with TalkTalk’s Wholesale division). Since then, we’ve heard very little and they’ve yet to launch any ultrafast broadband plans.

By comparison Shell Energy, which sprouted their own telecoms business after gobbling First Utility back in 2017/18 (here), have been busy growing and now has a total of around 130,000 broadband customers. Suffice to say that the operator doesn’t plan the stop there and they recently emerged as the “preferred bidder” to acquire the Post Office’s broadband base (here).

As such nobody will be surprised at the confirmation today of Shell’s move to gobble up the Post Office’s base. Both providers hold a similar position within the market and have similar products, although Shell has already launched a number of ultrafast broadband packages and they no doubt see some opportunity from up-selling their energy products to a larger customer base.

Ed Kamm, CEO of Shell Energy Retail, said:

“We’ve been in the business of providing fast, reliable broadband to thousands of customers across Britain for many years. Today we have signed a deal to welcome nearly half a million more broadband and telephony customers from Post Office. We expect to complete the deal in the coming months.

Our priority is to help our customers access cleaner, convenient and competitive home services; and to provide solutions that will help them to reduce emissions.

A cleaner, zero emission future requires a smarter energy system. In the home this means more interconnected devices such as smart thermostats, electric vehicle charging and battery storage. To support a more efficient and ultimately cleaner energy grid, all of these appliances need to be connected.

Internet connectivity unlocks efficiency and control. The successful convergence of energy and broadband are vital for a lower carbon, multi-source energy system. The energy transition is underway, and I want Shell Energy to be at the forefront of the technology change our customers need.

In order to do that we need to give energy and broadband customers a great experience and a compelling proposition. In growing our broadband business alongside energy, we are focused on doing just that.”

The combined business will be home to almost 600,000 broadband and phone customers, which puts them just behind Vodafone in terms (scale) of their fixed line base. Otherwise, the process of migrating the Post Office’s telecoms base over to Shell will start once the new deal has completed (in a few months’ time) and customers can expect more details to follow in the future.

Meanwhile existing Post Office subscribers have been told that their “service will continue as normal, and you’ll experience no interruptions throughout the transition“. On top of that they claim “there’ll be no increases or changes to the prices you currently pay,” although we suspect that this may change as subscribers eventually come to re-contract at the end of their current terms.

One potential risk here is that the PO’s telecoms base is significantly larger than Shell’s and so the latter would need to rapidly scale-up their support teams in order to cope (not so easy), otherwise any migration could be a very choppy ride (risk of confusion, billing errors and other mistakes etc.).

Leave a Comment
17 Responses
  1. Pete says:

    £170-£200 per customer acquisition cost for BB/phone services.
    WOW.

  2. Mml says:

    Post Office was famous for offering cheap ADSL packages – if I remember right they even didn’t use ADSL2, just ADSL up to 10 meg, to make it cheaper. Shell, however, have just done away with offering ADSL packages altogether and are in the middle of upgrading everyone to fibre, while upping the price by £2. So I’m not sure the “cheapskate” customer base Shell just bought will want to stick around with them for long.

  3. Mr says:

    I feel sorry for PO customers, Shell is just a rebrand of “First Utility” – I was with them a few years ago and would NEVER use them again. If my mother was on her death bed and asked me to sign up to them, it’d still be a no!

    1. Jay Rayner says:

      Oh no! I hope she is OK. Condolences

  4. JP says:

    I’ve got another couple of months of £15.90 per month with post office then another 12 months of fixed £17 per month.

    I have been told today by post office that price fixes in contracts will be honoured.

    Come April 2022 if shell hike their prices up I will be gone.

    Post Office broadband caters for the cost savvy,thrifty & frugal types – if they start dishing out bills with big price increases, people will walk.

  5. JP says:

    Just looked at shells prices for 11mb ADSL – it’s £21.99, that’s nearly £5 per month more than post office at £17 per month.

    That’s a £60 per year increase.

    I think when my contract ends, shell will be getting their p45.

    1. Phil says:

      It looks like the Post Office standard price for 11mb is £29 a month (https://www.postoffice.co.uk/dam/jcr:43f9aba1-2658-4eaa-b742-9b837504e09f/Line-Feature-Rentalsv18.pdf). £17 must have been a deal. I signed up for the Shell Energy 11mb last year on a deal and pay £14.99 and my price doesn’t change when the contract ends. I got cash back as well on that. It was through money savings expert who I’ve noticw often promote them on their emails. I’ve not had any problems.

    2. Mark Jackson says:

      Yes £17 was one of their initial contract term discounts.

  6. JEM says:

    A ‘heads up’ to anyone who has a Post Office Homephone package without broadband. Shell does not offer a stand alone phone line rental for calls so you will be unable to carry it over when PO is transferred to Shell.

    1. Moo says:

      What are my parent’s options? They have zero interest in having an internet connection

    2. John says:

      Yes they will. While they don’t offer it as a standalone product their systems fully support it and anyone who has a phone only package will retain it exactly as before on the same terms. I don’t work for Shell Energy but I am involved with the project.

  7. Gerald Brady says:

    I noticed that my telephone ring changed from a double ring to a long single ring a couple of weeks ago. I wonder if this is because it has changed from the post office to shell

    1. John says:

      No it’s not related, no activity has taken place yet and when it does there is no changes on your phone and/or broadband service needed.

  8. Bernadette McManus says:

    Received an email this morning from PO informing me of the changes……knew nothing about it until today and like everyone else, will carry on to the end of my contract and keep my options open. However my elderly mother who has a phone line only and can phone her family in Ireland anytime of the day on her package will undoubtedly not get such a generous deal under Shell.

  9. Gary says:

    With reference to Gerald Brady’s question above, (Feb. 18th) I to have noticed a change to my telephone ring. I’d really like to know why this has happened as the Post Office were of no help.

  10. Beverley says:

    I have only found out today by letter in post today starts taken over by shell on 16th march i am only sticking with them until end my contract which finish in 6 months middle September.

    Will continue with them until end contract if goes up then leave noticed they only do 18 months. Where live have fibre it still slow because live long way box and rural area so will still be slow speed never been with shell energy before. But people told not to with them and put there prices up so looks like be leaving if not happy.

  11. JP says:

    Is Shell’s broadband still powered by talk talk business?

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