Telecoms giants limbering up for a final shakedown
THE avowed interest of BT in acquiring a mobile phone player has unleashed feverish activity in the telecoms sector. Every move now has to be watched through this prism.
Sky, having recently spent £7bn on buying Sky Italia and Sky Deutschland, is now building a cash pile for the battles ahead.
The sale of Sky Bet, its online gaming site, to private equity firm CVC for an immediate £600m is part of a much broader game.
Sky could be gearing itself up for a bidding war with BT and others for the next auction of Premier League rights in the New Year. It may need them if it starts to look like a minnow in the telecoms world.
BT, if it’s reunited with O2 or seeks to merge with EE, will be well on its way to becoming a genuine ‘ quad play’ operator offering broadband (in which it is market leader in the UK), fixed line, TV and mobile contracts.
It is not the only company seeking to remake itself ready for a convergence of technologies.
The biggest beast in the UK jungle is Vodafone with a market cap of £55bn (post the sale of Verizon Wireless) which gradually has been piecing together a cable and fixed line network across Europe. What it lacks is the production capacity and film and football rights of Sky or the extensive network of Virgin Media, part of the Liberty Global empire controlled by tycoon John Malone.
One possibility is that Vodafone could move on Sky, but it is thought not to be impressed by the satellite technology which has been so successful for Murdoch’s interests in Britain.
That leads to the possibility of a grand alliance between Vodafone and Liberty Global.
This might seem unattractive to Vodafone which, having jumped out of a cool relationship with Verizon in the United States, could find a deal with a forceful media player like John Malone, one of the few people to directly take on Rupert Murdoch, like jumping out of the frying pan into the fire.
It would, however, give Vodafone access to a vast cable network across Europe. Moreover, it would be a far quicker way of bulking up and becoming a leader in European ‘ quad’ play. By all accounts, all the players are circling each other at present waiting for the first move that will trigger a ferocious bidding war.
Whether or not Vodafone’s big guns, led by chief executive Vittorio Colao, are quite ready to share a boardroom table with the mercurial Malone is another matter.
Scapegoat
IT WAS almost inevitable that someone from the Financial Conduct Authority would have to fall on their sword after the bungled March leak of an intention to probe the life insurance market.
The case for looking back at the way endowments, life policies and other products have been sold over the years is overwhelming.
Policyholders have been treated abominably, while shareholders have filled their boots at least twice.
But it was unseemly that the FCA, there to police markets for the consumer and investors, should have caused a disorderly market by allowing price- sensitive information to leak.
The premature departure of Clive Adamson, the head of supervision, and the person thought to be responsible for the early release of information, looks unsurprising ahead of the publication of an official report.
The bigger question is whether the head of the agency, Martin Wheatley, should go too.
His reputation has been shored up by the brisk actions against the banks over foreign exchange rigging and the powerful restrictions imposed on payday lenders. Wheatley deserves a second chance.
Jeremy Thorpe
THE death of former Liberal leader Jeremy Thorpe, after a long illness with Parkinson’s, is terribly sad. Under his charismatic leadership the Liberal Party led in the polls in the 1974 election.
My encounter with Thorpe came during the scandal of the London & County Securities bank where he was a director and which collapsed in 1973. After writing critical articles, I received a phone call from Thorpe when he told me to ‘watch it!’ He was later found to have committed ‘errors of judgment’ for being involved in the venture.
Worse followed when he became caught up in a sex scandal which ended with Thorpe being cleared in 1979 at the Old Bailey of an alleged murder plot.