As another player joins the Big Six, hopes increase for more energy competition
Telecom Plus to supply 770,000 customers after deal with NPower worth £218m
The "Big Six" energy suppliers may soon need to be renamed the "Big Seven", according to Npower's chief executive Paul Massara, after the utility giant struck a £218m deal with Telecom Plus that will transform the smaller company into Britain's largest independent gas and electricity retailer.
As part of the package, Npower has agreed to supply energy from its generation unit to Telecom Plus at a reduced rate for 20 years.
The deal will see 770,000 customer gas and electricity accounts transferred to Telecom Plus's Utility Warehouse subsidiary. This already manages the accounts on behalf on Npower. Andrew Lindsay, the Telecom Plus chief executive, said the deal would increase competition and boost his ability to keep a lid on prices, potentially shaking up a retail market that stands accused of inflating prices.
"The anticipated acquisition of our own energy supply licences from Npower enabled us to keep our recent price rises significantly below the average of those which had previously been announced by the Big Six," he said.
Earlier this week, Npower was revealed to have the highest complaint rate among the Big Six, according to research by Consumer Futures.
Yesterday, Mr Massara played up the idea that this deal was good for the consumer, saying: "In one move we have helped create the biggest independent competitor in Britain's household energy supply market… Britain is well on the way to having a Big Seven rather than a Big Six."
British Gas, Edf, Eon, Npower, Scottish Power and SSE comprise the Big Six.
Asked by The Independent if he would like to be one of the Big Seven, Mr Lindsay said: "At one level yes and on the other, categorically no. We do have the legs to become the size of a Big Six company, yes, but do we want to be termed as a member of the Big Seven? No."
He added: "The Big Six are vertically integrated – with a generating and a retail arm – whereas we are a customer-centric, multiple-utility, offering telephone, mobile and broadband services as well as gas and electricity.
"We offer a good price, service and the convenience of a single-utility supplier."
Asked whether that put his business at odds with the Big Six, he said: "I'm not going to denigrate the Big Six, but we think we deliver exceptional customer service and great value."
Following the deal, Utility Warehouse will have half a total of a million customers, or households, to which it will supply a total of 1.75 million gas, electricity, broadband and other services. Just under 800,000 of the service contracts will be for gas and electricity. In the "medium term", Mr Lindsay wants to supply about 1m customers, at which point he expects the number of energy services it supplies to have almost doubled to 1.5 million.
Although this is a significant customer count, it would put it well behind the Big Six – Npower will have about 4.7 million customer accounts after this deal, while British Gas has more than 10m.
However, Mr Lindsay said Utility Warehouse eventually had the potential to be the size of a Big Six company, adding that growth would be achieved organically rather than through acquisitions.
He said he hoped to attract new customers largely through price and pledged to pass on any cuts in the green levies to be announced in the Chancellor's Autumn Statement next month. "We intend to maintain consistently competitive energy prices in future as we continue to grow," he said.
The Telecom Plus deal with Npower will be partly financed through a £130m share placing. Telecom Plus also reported a 10 per cent rise in first-half profits and raised its interim dividend by 23 per cent.
- 1 The black and blue dress: Makers considering a white and gold version
- 2 Husband and wife die holding hands within hours of each other after 67 years of marriage
- 3 PornHub turns masturbation into energy in bid to save the planet
- 4 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
- 5 Saudi Muslim cleric claims the Earth is 'stationary' and the sun rotates around it
Boris Nemtsov shot dead: Putin critic may have been murdered by Islamic extremists, says president-led committee
Stephen Hawking's wife Jane Wilde on their marriage breakdown: 'The family were left behind'
British are sexually uptight, dirty and drink too much – according to Spanish book
PornHub turns masturbation into energy in bid to save the planet
White and gold or blue and black – what colour is the dress? An eyewitness gives a definitive answer
New theory could prove how life began and disprove God
This is what it's like to be dead, according to a guy who died for a bit
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Ukip would cut billions from Scottish budget to fund English tax cuts
Russia's roadmap for annexing eastern Ukraine 'leaked from Vladimir Putin's office'
iJobs Money & Business
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...