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Tuesday, October 24, 2006

For Sale: 50k Demon/Legend Home Users

Thus has bought a couple of ISPs over the years: Demon & Legend spring to mind. Today, they have put the 50k home users of these ISP’s up for sale. Note they plan on retaining the SME customers.

I'd love to know if it was BT that approached them and it seems extremely sensible to me not only to sell, but to sell via an auction. Also, the price that Thus achieves will be a really important benchmark for the smaller ISPs which will come on the market over the next couple of years. Effectively the purchaser will only be buying the customer base and one that is presumably loyal to Demon/Legend, because neither of them do any serious marketing and probably the prices charged are higher than currently in the market. Personally, I would be balancing the risk of churning vs the economies of scale in LLUing.

The result could also be surprising: as well as the usual suspects (BT, CPW, BSkyB & Orange) I could see that the quality of the base appealing to both o2 and Vodafone and will give them a little momentum.