Piers Daniell

We laughed in the office on the news that Easynet is finally being sold off by Sky as I have been saying it would happen for over a year. Some believed me, some didn’t but my reasoning was sound. Ever since Sky bought Easynet it has been an uneasy marriage of a vast consumer brand and a very business focused one. Easynet was one of the first to get involved with LLU (local loop unbundling) in the UK and were able to launch products way ahead of BT. Something Sky obviously liked when they paid well over £200m for the business even though, by then, they were actually buying an old network and much of it needed to be upgraded.

Unlike O2, who at the same time, paid a fraction of that (£50m) for BE. They had a much newer infrastructure, and after all the upgrades to make it fully national was less than Sky originally paid for Easynet. But when you look at how Sky treated Easynet it was still segregated within the organisation and divisions were created to ensure a nice clean break when the time came to offload it. I think they did very well to get £100m for it, especially as the actual valuable part, the network, has remained in Sky’s hands meaning Easynet are now just a third party with a good supplier agreement. But again, like when Sky bought Easynet originally, it was done by a company who didn’t understand data communications and this time they found some bankers who obviously were taken in. I don’t think the amount demonstrates value for money and it will be a difficult business to float/sell in a few years when the venture capitalists decide they want their money back.

Obviously for us it probably means a bit more competition in the coming months as the business gets some much needed direction, but with no innovation over the past four years they are going to struggle to catch up. While they have an enviable client list, I am sure the customers coming to the end of their dire 5-year terms will be ready to for a change. So good luck Easynet – you are going to need it!

After working in the telecoms industry for a number of years I have always been interested in why on the whole it has a bad reputation. Not necessarily as poor as recruitment or estate agencies but for a service lead industry it isn’t very good and the quality of service customers receives seems to vary tremendously between providers.

You can sort of understand if you are a consumer paying £11 for a service that there isn’t going to be much profit for the carrier and so you are going to be speaking to a call centre in India. But if you are business paying many hundreds if not thousands of pounds a month that you would expect an excellent level of customer care. This is not always the case and one of the biggest problems I see is the push to sign customers up to long contract terms.

If you are confident that you provide your business customers with a high level of service and that they are receiving exactly what they require then why make them sign a 3-year or 5-year terms? We have had an unusually high level of Easynet customers contact us recently who have had their SDSL or SureStream products in place for a while and to receive a discount on their existing line they have to commit not to 12-months but for another 36-months! I even spoken to a number of high level businesses reviewing their connectivity that not only have long contracts in place but also a committed spend written into their contract.

This from my perspective is just ridiculous and puts very little emphasis on the carrier to perform and just goes to show me how concerned they are that their clients might go elsewhere…. Fluidata on the other hand has always just backed off the minimum contract term and after that period all customers are on rolling monthly contracts. That way clients can be flexible and we have to work hard to ensure they are getting the service they demand.

I can see why our competitors do it as it adds value to your business. If you ever look to sell, you can demonstrate the contractual revenue streams to the buyer. I just don’t believe in the long term this strategy does the business any favours.