BT snapped up Redstone's telecoms network in the UK yesterday for a symbolic £1 in a move expected to generate £170m of sales over the next six years.
In addition, the telecoms giant is taking on £4.5m of Redstone's debt, leaving the latter with just over half a million pounds of borrowings.
"We'd been exploring the options alternative operators face in the current markets which are – get big, get out or partner with someone who is big. Running a network is a high-volume, low-margin game and if you haven't got the clout you're not going to be able to run it and make a profit," said Ian Brown, Redstone's chief executive.
Under the terms of the deal, BT will also run and manage Redstone's national voice network in a six-year contract it estimates is worth about £170m and will take on about 20 of Redstone's 400 staff.
Mr Brown said the move would enable Redstone to generate savings as well as provide telecoms services "which would otherwise be beyond our reach".
Redstone will now focus on providing a broader portfolio of services to its customers, which include Thomas Cook and Bradford & Bingley, as well as on its systems integration business and on its ISP operation.
"We're still providing telecoms services, it's just that BT are running it for us," Mr Brown said. "Our customers get the best of both worlds. They get the innovative packages and tariffs we can offer combined with the security of knowing BT is running the network."
The company said the deal would help it move toward making an underlying, or Ebitda, profit every month.Reuse content