Vodafone buys Perlico

Elephant Man

I am new to this so I am not sure if I am posting in the right place. Well here goes anyway :
Vodafone bought Perlico a few days ago. In telecoms terms this is a major issue yet it has attracted only minimal column inches in any of the papers.
Nor has it received any comment from the regular posters here on IOL. Why?This must be the first time that a mobile operator has purchased a fixed line operator - it is usually the fixed line guys who buy out the mobile guy.
Why did they pay 80 million for a company that lost 7 million last year ?
Perlico is not a "real" telco inasmuch as they are basically resellers of other products. So what have they got that is of interest to Vodafone ? My interest in this is that I dabble in the stock market (dabble being the operative word) and I cannot understand the reason for this move. Obviously the fact that Mr Smurfit bought a share of Perlico a few months back should have flagged that something was on the horizon that we mere mortals were not privy to. It is hypothetical at this stage but anybody out there got any theories ?

bk

I must say that when I heard the Vodafone bought Perlico I thought it was bizarre.

Perlico are a fairly second rate telco who just resells Eircom products.

Perhaps Vodafone are going to start sell bundled mobile, landline and broadband packages.

Hopefully they will push LLU out of Perlico and actually offer something new.

This isn't the first time Vodafone bought a telco, they bought Tele2 in Italy.

cgarvey

Convergence, surely

smellslikeshoes

I think the costs of getting involved in serious LLU would simply make it not worth it for Vodafone. Even the price of buying a company like smart would probably be substantially more because of the equipment they already have in the exchanges. I think when you look at the different options Vodafone had to get into the Irish teleco market Perlico is really the only one thats even remotely realistic, 62000 customers is a decent enough market share for a relatively small investment for Vodafone.

Another reason why they have bought out Perlico that might be slightly less obvious is Perlico's deal with 3. I would think this has put a serious spanner in the works for 3 Ireland.

Their aim when they bought out perlico is so they could provide bundles. They now have the ability to provide Home phone + broadband + mobile broadband + mobile phone. AFAIK nobody else at this moment can provide all that together in Ireland, the exception to that is Eircom and Meteor who should be able to do it in the future but not at this time.

I can see all mobile providers getting involved with fixed line services in the near future, by buying in to it or an agreement similar to what 3 had with Perlico before the sale.

thegills

Perlico wouldn't see themselves as a Telco per se rather a company that is just good at selling, telecoms services in this case. Everytime you get Sky magazine or an ESB bill a Perlico advert falls out.
The current value of he deal is nearer €30M with the remainder to be paid based on future performance.
It's still over valued though at €500 per customer in my opinion.
Iain McDonald is one happy camper i would imagine..

dahamsta

Perlico in 2 words: Marketing Company.

Cabaal

dahamsta wrote: »

Perlico in 2 words: Marketing Company.

Agreed to a point, Perlico has a good image to customers and is seen as the little guy against the mighty Eircom,

If Vodafone can make a few euro from the fixed line and broadband business as well as using Perlico's customers base to advertise its mobile offering then its all good in there books

Just looking at Perlico's website it looks like they've finally removed three's resold Mobile Broadband offering although its still mentioned in the page title of the site

watty

They'd need to up the prices. The current perlico pricing runs at a loss. Did Vodaphone really pay €85M for a customer database? Unless eircom wholesale prices drop or all reseller prices go up, it looks like it. €85M is a bit expensive just to remove some marketing for "3".