Broadband Britain: More fallout
Euro1Net has had its’ umbilical cord cut by BT Wholesale for non-payment of invoices. This leaves around 5.5k broadband customers in deep trouble. A notice on the company website says it can’t issue customers with MAC codes and therefore they are prevented from swapping broadband suppliers.
The worst of it is that Euro1Net’s unique selling point is that it allows its’ customers to prepay broadband costs for 12 or 24 months, so customers will be faced with the huge difficulty of getting money back from a company teetering on the edge. We shouldn’t laugh at the afflicted, but a BBC News reporter seems to have been caught out.
OFCOM claims to be watching the situation closely, but I’m not sure what OFCOM can do apart from change the rules regarding issue of MAC codes to allow BT Wholesale to issue them in the event of a broadband supplier going bust. I suspect this type of problem will become a feature of the market rather than the exception as the market consolidates.
Another small UK ISP, BrightView, with around 40.5k customers is also heading for trouble: the parent company Inox who released annual results this week have a division up-for-sale and are renegotiating with Barclays Bank about its’ overdraft. Inox has an interesting history seemingly jumping from one fad (ringtones) to another (scratchcards) without ever making a real impression or return for shareholders. The purchase of the BrightView ISP in 2004 for £25m looks like another case of unfortunate timing. The shame is that BrightView are actually considered quite a good ISP with brands such as Madasafish winning awards and Brightview being trusted with the Waitrose supermarket brand for reselling broadband. The directors expect consolidation ahead in the market and perhaps this is a sign that the ISP is also up-for-sale. They better be quick because Inox’s market capitalization has fallen by 80% over the last 12 months to approx £5.3m which is far less than they paid for BrightView and they raised £15m in equity at the same time!
I suspect that the small independent consumer ISPs are heading for a really harsh winter.
The worst of it is that Euro1Net’s unique selling point is that it allows its’ customers to prepay broadband costs for 12 or 24 months, so customers will be faced with the huge difficulty of getting money back from a company teetering on the edge. We shouldn’t laugh at the afflicted, but a BBC News reporter seems to have been caught out.
OFCOM claims to be watching the situation closely, but I’m not sure what OFCOM can do apart from change the rules regarding issue of MAC codes to allow BT Wholesale to issue them in the event of a broadband supplier going bust. I suspect this type of problem will become a feature of the market rather than the exception as the market consolidates.
Another small UK ISP, BrightView, with around 40.5k customers is also heading for trouble: the parent company Inox who released annual results this week have a division up-for-sale and are renegotiating with Barclays Bank about its’ overdraft. Inox has an interesting history seemingly jumping from one fad (ringtones) to another (scratchcards) without ever making a real impression or return for shareholders. The purchase of the BrightView ISP in 2004 for £25m looks like another case of unfortunate timing. The shame is that BrightView are actually considered quite a good ISP with brands such as Madasafish winning awards and Brightview being trusted with the Waitrose supermarket brand for reselling broadband. The directors expect consolidation ahead in the market and perhaps this is a sign that the ISP is also up-for-sale. They better be quick because Inox’s market capitalization has fallen by 80% over the last 12 months to approx £5.3m which is far less than they paid for BrightView and they raised £15m in equity at the same time!
I suspect that the small independent consumer ISPs are heading for a really harsh winter.
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