Shell Puts FOR SALE Sign Over UK Broadband ISP Shell Energy
The parent company of UK retail energy and broadband provider Shell Energy has announced their intention to sell the company, which follows a major “strategic review” of the business that was launched in January 2023 due to “tough market conditions“. Reports claim that Ovo and Octopus Energy may have already placed bids.
Firstly, it should hopefully go without saying that Shell Energy, much like many other retail providers in the energy space, has faced more than a few challenges over the past year or two (e.g. they lost almost £220m across 2020 and 2021). Such challenges have already caused the collapse of various rival operators in the same market, and Shell are by no means immune to those problems.
At the same time, energy provision has always been the provider’s main business, with broadband arguably being more of a side-show to aid customer retention. Not to mention that their telecoms division has been consistently topping Ofcom’s quarterly consumer complaints tables for well over a year (here). But tackling such problems would require more investment, which appears to be something that Shall just isn’t willing to do.
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Shell has thus today confirmed that Shell Energy is to be sold (excluding the linked B2B Wholesale and SME customer supply business). A spokesperson for Shell said: “A sales process is already under way, with the intent to reach an agreement with a potential buyer in the coming months. Deal completion would be subject to the usual regulatory and other approvals.”
Multiple reports similarly allege that both Ovo and Octopus Energy, among other interested parties, may have already tabled bids. But such a deal could potentially also result in their telecoms customers being sold off, at a later date, to another ISP. Something similar happened when Ovo acquired SSE last year and then later sold their retail broadband base on to TalkTalk (here). But Shell Energy is a much larger player.
“We are committed to supporting both customers and staff and protecting customer interests during this period, and to ensuring a seamless transfer to a buyer capable of delivering on its obligations, including our intent to maximise employment,” said Shell’s spokesperson.
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
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How many customers do they have and which network do they use? Presumably Openreach?
@Alex Roughly 450K customers & yes, OR Based
Could Octopus Energy’s interest be linked to Fern Fibre, given both are owned by Octopus Investments? Could be interesting to see Fern start selling via Openreach, as well as introducing other ISPs to their networks via wholesale.
It’s a possibility, but I’d say that it may be one headache too many for Fern right now to resolve.
That’s a link I was unaware of.
It looks like… Octopus Group own both Octopus Investments, and Octopus Energy. Clients of Octopus Investments invest into Fern Trading; the latter is an unlisted company, who Octopus Investments provide management services for. The unlisted nature may reduce the inheritance tax payable, when the investor dies.
Fern Trading has then has investments in several sectors. As we know, this includes fibre and Giganet.
Looks like we will get a new contender for worst ISP, good riddance Shell!
Jokes aside, have to agree with Mark, likely the customer base is being sold off by the new owner but I just don’t see any of the established ISPs being interested.
I have said before my brother is using Shell broadband and it is fine, I went over there on sunday to sort out his computer and some other things and it his broadband works fine, gets a good 36Mb/s, not going to get any faster no matter who he is with on FTTC. The only thing is the router, I suppose it is ok for what it is, it does the job, but could be better in the Wi-fi area, but it works for him as he lives in a flat. I hope Talk Talk don’t buy it
I blinking agree shell broadband suck can’t move from as ìn contract goes off loads of times when I’m in fortnite so damn annoying
> I have said before my brother is using Shell broadband and it is fine
Good for him – but a single satisfied customer does not mean that everyone else is.
The objective data from Ofcom shows that across their whole user base, Shell has a higher level of unresolved complaints – those that need to get escalated to Ofcom – than any other ISP large enough to be included in the results.
If Shell gets bought out by anyone (even Talktalk) it will be objectively an improvement in customer satisfaction overall.
@NE555, I realise one satisfied customer don’t mean that everyone else is, I detest Talk Talk, while i have never been with them myself I have had a few run-ins with them over the years on behalf of other people, but I also realise there are a lot of people that are happy with them.
I would not take any notice of those at Ofcom if they told me the grass was green and the sky was blue., I would have to go and look.
The router is not great that shell provides and that could be a lot of the problem people have, not saying for everyone, but for a lot. with more and more people relying on Wi-fi, providers need to get routers with better Wi-fi, saying that I still think the 2.4Ghz band is better than 5Ghz in some ways.
My brother renewed his contract last month, so stuck with them for a while, hopefully the next time Fibre will be available to him and if he can get it at a decent price then go for that. But he says he doesn’t need fibre speed, and he is right, I feel the same way, but at the right price.
Given the average age of Shell’s customer (unusually high due to the number of old Post Office customers), very high volume of WLR and low volume of SOGEA or FTTP, I’d imagine the broadband base is a tough sell. Someone will want it but its not worth nearly as much as it might overwise be.
This is one thing that wasn’t made entirely clear in the article. Is it just the ISP business that Shell is selling, or both the ISP and energy supplier?
Well, I thought it was clear, but in case it isn’t the whole Shell Energy operation is up for sale in multiple European countries. That’s not the upstream oil and gas activities, it’s the domestic gas and electricity business they bought that was previously called First Utility, with bolt on offers in things like telecoms, and modest expansion into Holland & Germany.
The backdrop to this is that Shell were big on oil and gas, but with the shift to renewables they could see demand slowly and irreversible shrinking, thought they’d better build a new business in a sector that they hoped would benefit from this shift. What better than home energy – we’ll always need heat, light and domestic power, as well as electricity for this perfect future world of electric noddy cars. Like most companies who became new entrants in domestic energy supply they asked themselves “how difficult can it be?” and got the answer wrong. By broadening the offer to include telecoms they hoped to ape the success of Utility Warehouse who’ve done well commercially as well as being both stable and retaining customers fairly well.
In practice Shell’s bet didn’t pay off. Retail energy supply is (like telecoms) vast more complicated and challenging than it looks from the outside, as well as being very risky. Most of the critical success factors and risk factors are radically different between big oil and retail energy so Shell had nothing they could call on internally to support this gamble. The struggled to grow as much as they needed, the margins were paltry compared to the upstream activity, political intervention and regulation tied their hands, and Shell group management were unconvinced that this strategic shift was paying off now, nor ever would. The Shell brand turned out not to be the differentiator they hoped for, and the operating problems at Shell Energy started to soil the bigger brand awareness (and for Big Oil that’s saying something). So group execs have pulled the plug.
Its funny they keep offering me 6 months free broadband to switch to them (I got dumped with them for energy when my provider failed). Wouldn’t touch it with a 18 month free barge pole.
If now broadband wasn’t owned by sky, it would be a classic set of new NOW customers as they seemingly don’t want to do anything but pstn based products
I do worry that Octopus may start losing their focus if they acquire a broadband provider.
They’ve got a few very interesting energy products on the market but many still feel rough around the edges and it seems like they still have a lot of development work to do…
I have been with Shell Broadband about a month – They offered me 6 months free, and I gave it a go, even after seeing some negative reviews.
When I run a speed test it shows my supplier as TalkTalk.
Their FTTC seems stable so far. I am pretty close to the cabinet.
They sent a Zyxel router which does the job.
Yeah me too, switched to them about 2 months ago. Recently ran a speedtest and it came back talktalk. I didn’t get any free months, but got a cashback deal with a amazon gift card.
I also have the large white Zyxel router which compared to my Now broadband router seems much more comprehensive.
Just signed up with hey broadband (whenever they get round to building it)
I think the last provider we actually chose to go with was Fuel Broadband. They were okay, but we then got passed to Post Office. No problems there, but then we were passed to Shell. All done very smoothly and works well. Gawd knows who we will end up with next. We are with Octopus for electricity, but I find it impossible to understand their pricing! (The wife deals with that, and she’s welcome). We had a salesman from BT/EE at the door recently, who asked if I had noticed all the activity locally. I said yes, I had noticed a lot of men poking cables down holes, and was it to do with 5G? His response was: ‘5G? What’s that?’ A worrying reply indeed. We have three new 5G towers in the area, which appear to belong to EE.They have obviously been told to tread carefully with the subject. There will be at least three providers in this area, one being Toob. How will they make a profit?
Interesting reading into Shell Energy, as it appears they are a wholesale customer of TalkTalk? I wasn’t aware that TalkTalk, or any OR wholesale customer for that matter, was able to wholesale OR’s wholesale network. Surely this wouldn’t be permissible under a wholesale contract? Keen to hear any insight