O2 linked to fixed line purchase


O2 is close to purchasing a fixed line provider to expand its offering to the SME and corporate markets, Mobile News understands.

O2 denied it was close to purchase of a fixed line supplier. However O2 distributors and dealers claimed to have been consulted already on how an O2 fixed offer might fit into their existing sales propositions, and several sources linked it with a deal for Hull-based Kingston Communications, which itself denied any O2 activity.

Kingston directors bought shares in the business at the end of August, sparking speculation a deal is in the offing.

O2 has said repeatedly it wants to be “communications integrator of choice”, and has also stated its fixed line activity will ramp up in Q3. However, it has always maintained it will only purchase another provider if it makes better sense than to partner with it. O2 already works with BT for fixed line provision.

Kingston achieved operating profits of more than £30 million in its financial year ending March 2009, with revenues of more than £472 million. It employs more than 2,000 staff and is estimated to be worth £400 million in any purchase.

The group consists of a number of brands including Kingston Communications, Afiniti, Smart421, Eclipse and Karoo collectively offering converged services and solutions for fixed line voice and data, including IP, mobile voice and data and IT for both business and consumers nationwide.

Kingston Communications also has a direct partnership with O2 to provide its own customers with mobile telecom products and services converged with its own offerings.

O2 is expected to announce the move next week.