Easynet is offloaded

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!

1 Comment

  • Randal Fitzurse says:

    The other problem that Easynet has as an employer is one of location.

    At the moment it is attempting to recruit various teams of engineers as a result of it’s split for Sky and it’s move from Brick Lane to rural Somerset (Shepton-Mallet).

    Shepton-Mallet is not exactly in the heart of Silicon valley any more than Silicon Glen.

    Any potential recruit will have to think if the move career and family wise is worth the upheaval when one takes into consideration that Easynet is very much a lone star geographically, say from the M4 corridor hi tech industries that offer potential future recruitment.

    Whilst it has cast it’s recruitment net far and wide locally encompassing Newport to the West and Swindon to the East, a daily commute of well over 150 miles may prove to be too onerous for some to make the move when they are already well within the M4 corridor.

    Existing local competitor employers currently seeking the same skill set can be found for example in Bristol (Logica, Centrica,BT) with Poole to the South along with Bournemouth and Bath and Chippenham.

    Salaries whilst competitive may not be enough to entice the more highly skilled vendor certified engineers sought who invariably have their eye on the next job.

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