Communications service provider Cable & Wireless has approached business telecoms-focussed vendor Thus, with a view to acquiring the company.
Thus has confirmed the approach, but told its shareholders to take no action at this time. "The Board remains focused on delivering maximum value for shareholders and will evaluate any proposal from any third party against the value that the Company can deliver as an independent group", it said.
Gartner research vice president Neil Rickard said, "We've been expecting consolidation in the service provider market for a long time. There were a lot of players there, and there are even new players entering the business telecoms market targeting it aggressively. So, it's a very overcrowded market and getting worse - this makes it better."
Rickard added, "In terms of a pairing – this looks like a good fit - broadly similar cultures, broadly similar type of customer – fairly flexible approach to customers as well. C &W has things in its portfolio that Thus hasn't got, like fixed mobile convergence (FMC) and a lot of DSL. C&W doesn't get anything skill wise – but it gets a bit more bulk."
The acquisition could spell a harder time for BT Global Services, since Cable & Wireless has undergone a recovery of sorts lately, according to Rickard, "If I'm BT I'll not be exactly trembling in my boots, but my market will get tougher."
Rickard added that consolidation had been on the cards, but added that the global credit crunch could "trigger consolidation – because some of the operators are financially marginal, as to whether they're making money or not. So bulking up to gain access to money will also push you towards profitability, but the 'credit crunch' could also be a catalyst to further consolidation, which I think is going to happen anyway."
