Broadband ISP Home Telecom Acquires Homeshift

UK ISP Home Telecom – a subsidiary of the Telecom Acquisitions (TAL) group (TalkTalk holds a controlling stake) – has today announced yet another acquisition in the form of Homeshift, which is a fully fledged and licensed energy and internet provider that gives you a single bill for your energy, internet, council tax, and water.

As usual no financial details of the transaction were released, although it will no doubt feed into Home Telecom’s ambitious growth plan, which targets circa £38m servicing 100,000 properties “in the near future“.

Homeshift is said to have taken the strategic decision to sell the assets of the base to enable the company to continue with its software development plan. The recent introduction of a ‘Stop Sell’ on older analogue phone lines is said to be a driver for the deal, which had been limiting further growth of the base.

Nigel Barnett, CEO, said:

“Many of the companies that have been around for a few years still have ADSL, PSTN and FTTC connections. And it has become apparent over the last couple of months that these customers are far more expensive to move across networks, if indeed you can, therefore it affects valuations instantly.

Taking into account the new breed of Altnets bases that we have acquired over several different networks recently, which in the past had the advantage of being able to be moved for greater profitability is no longer there. With the Altnets pricing being so cheap at the moment there is no real advantage of scale. Thus, the old adage that everyone used to base their worth on price per customer is now well and truly out of the window. Instead, EBITDA is the only true measurement but with everyone’s churn increasing because of the Stop Sell and residential customers on shorter contracts valuations are continually affected.

However, on the brighter side our advantage of being part of the TalkTalk group with millions of customers, our cost of severe is well under control and therefore lets us substantially grow in these changing times without increasing overheads.”

Home Telecom added that they continue to “have a real appetite for further expansion” and thus we can probably expect more deals like this one in the near future.