Vodafone Close to Singlepoint Buyout

The UK's Sunday press has been reporting that Vodafone is close to completing negotiations to buy the customer base operator, Singlepoint for upwards of US$642 million. Singlepoint manages the billing accounts for around 1.5 million subscribers, mainly on the Vodafone network, but also a few on the O2 network as well.

The company is 97% controlled by the mobile phone millionaire, John Caudwell who is reported to be the UK's 26th richest person with a personal fortune of US$1.3 billion, according to the Sunday Times Rich List.

Singlepoint buys airtime from the networks and resells to customers through its chain of Phones4u stores. It was not immediately clear if the deal will include the retail chain as well. If the deal does include Phones4U, then a large number of store closures can be expected as the chain competes with Vodafone own retail outlets.

When Vodafone and the then Cellnet were granted cellular licenses in the mid 80's, they were forbidden from selling directly to consumers, so Service Providers were set up to manage the consumer selling. Singlepoint is one of the last independent Service Providers left in the market as following rule changes a few years ago, the networks were allowed to buy up the companies and sell direct to customers.

Service providers like Singlepoint typically take a 25% cut of users' monthly bills, the papers said."

Posted to the site on 11th August 2003