Deutsche snaps up One2One in pounds 8.4bn deal

ONE2ONE, BRITAIN'S smallest mobile telephone operator, was yesterday sold to Germany's Deutsche Telekom in a deal valuing the loss-making business at pounds 8.4bn.

The sale will net pounds 3.4bn for Cable & Wireless, the 50 per cent owner of One2One, raising the possibility of a windfall payout to its shareholders later this year.

Deutsche Telekom, which was defeated earlier this year in the bid battle for Telecom Italia, is paying Cable & Wireless and MediaOne of the US, the other joint owner, pounds 6.9bn in cash for One2One and assuming pounds 1.5bn of third-party debt.

The German telecoms giant was last week given exclusive rights to negotiate a deal after the only other remaining bidder, its rival German mobile operator Mannesman, dropped out of the running.

The purchase price represents a 30 per cent discount to the value of Orange, the UK's third-biggest mobile operator, and compares with initial valuations of One2One of up to pounds 11bn. But Graham Wallace, the chief executive of Cable & Wireless, maintained it was a very good deal and represented a 40 per cent premium to the average price of European mobile operators.

One2One has 2.65 million subscribers - all but 350,000 of them residential - and made an operating loss of pounds 52m on sales of pounds 781m in the year to 31 March. Four in 10 of its customers are on pre-pay mobile phone contracts.

Under Deutsche Telekom's ownership, the strategy will be to move more aggressively into the business market. A spokesman for the German telecoms giant said that One2One's large amount of spare capacity during the daytime hours could be exploited to carry more business and data traffic without interfering with voice traffic.

The One2One management, led by the managing director Tim Samples, will stay on. Although Mr Samples would have preferred a flotation of the business, One2One said a single committed owner would end the uncertainty and help the business to grow.

Together with the pounds 3.5bn raised from the sale of Cable & Wireless' residential cable interests to NTL, Cable & Wireless is likely to have net cash at the end of this financial year.

This will help it to fund its capital expenditure programme, which this year alone will reach pounds 3bn. However, Mr Wallace said that a capital distribution to shareholders would be one of the options C&W looks at. "It is nice to have to have a strong balance sheet but you can also end up with an inefficient capital structure," he added.

Outlook, page 19

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
News
Starting the day with a three-egg omelette could make people more charitable, according to new research
science
News
Top Gun actor Val Kilmer lost his small claims court battle in Van Nuys with the landlord of his Malibu mansion to get back his deposit after wallpapering over the kitchen cabinets
people
News
Comedian Ted Robbins collapsed on stage during a performance of Phoenix Nights Live at Manchester Arena (Rex)
people
News
The actress Geraldine McEwan was perhaps best known for playing Agatha Christie's detective, Miss Marple (Rex)
peopleShe won a Bafta in 1991 for her role in Oranges Are Not The Only Fruit
News
newsPatrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
News
Robert Fraser, aka Groovy Bob
peopleA new show honours Robert Fraser, one of the era's forgotten players
Life and Style
Torsten Sherwood's Noook is a simple construction toy for creating mini-architecture
tech
Sport
David Silva celebrates with Sergio Aguero after equalising against Chelsea
footballChelsea 1 Manchester City 1
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links