Comms Dealer

IT infrastructure services business Phoenix IT has been snapped up by acquisition- hungry Daisy Group in a deal worth circa £135m, valuing Phoenix shares at 160p each. The deal represents the biggest convergence of telecoms and IT service provision to date in the UK, leaving Daisy well placed for an increasingly off premise and hybrid cloud world, according to Philip Carse, Analyst at Megabuyte.com.

He said "The agreement will boost Daisy's EBITDA by 42% before synergies and create a £200m mid-market telecoms and IT powerhouse and boost Daisy's Partner division, alongside its existing SME business, in an organisation with total combined revenues of approximately £620m."

Daisy says the acquisition will create the first 'truly converged IT and UC provider in the UK mid-market'.

Commenting on the diversification of Daisy's product portfolio, its founder and Executive Chairman Matt Riley stated: "Phoenix's strengths in IT services and solutions - particularly its managed services and rapidly expanding cloud services - strengthens Daisy's existing portfolio of products and services that represent the converging world of traditional telecoms and IT."

Daisy CEO Neil Muller added: "Phoenix enhances our capability across the markets we operate in. It allows us to add to our capability and provide end-to-end solutions directly to our mid-market customers.

"Via our Partner Services business, we believe it will enable us to deliver further value to our partners who serve the enterprise market."

Peter Bertram, Non-Executive Chairman of Phoenix, commented: "Both Daisy and our own team share the same positive view of Phoenix's long-term growth potential. The combined group will provide a compelling offering to our joint customers into the future."

BDR Voice & Data Solutions has taken its acquisition tally up to seven following the purchase of a majority shareholding in Astute Communications and the takeover of Southern Voice & Data's assets.

The acquisitions bring the combined annual turnover of BDR, its subsidiaries and sister companies to over £10m.

It will be business as usual for Astute which is moving to new Manchester offices with all staff continuing with the company.

Astute operates in the large and medium-sized business market, providing lines, calls and mobiles and generates an annual turnover of £2m-plus.

The deal bolsters BDR's presence in the north west region and creates an opportunity for BDR to broaden the acquired company's portfolio mix, hoping to double Astute's turnover within two years.

BDR MD Julian Burkill said: "We see much potential in developing Astute, as well as the opportunity to strengthen our foothold in the north of England.

"Over the next few weeks we will integrate Astute into the BDR landscape, ensuring that our philosophy continues throughout all the companies under the BDR Voice & Data umbrella."

Swindon-based Southern Voice & Data is primarily an Ericsson-LG reseller with contracted customers for maintenance.

Phil Horwood, owner of Southern Voice & Data, will continue in a consultative role, working with BDR to augment and develop the existing base.

Horwood said: "I have been looking to find a partner company to help me and my customers achieve our goals. I was convinced this is the perfect match and had no hesitation to sanction the acquisition."

Astute MD John Irwin added: "BDR brings a host of products, services and opportunities, and an injection of cash that will enable us to increase our market share in the north of England."

FTTP broadband provider Hyperoptic has connected residential boats in London's South Dock marina, including South Dock and Greenland Dock, with gigabit connectivity for the first time.

Previously, occupants had no wired broadband connectivity options, which meant many residents relied on 3G dongles to connect to the web.

Hyperoptic services a number of nearby developments to South Dock Marina.

As with its installation process in traditional building developments, Hyperoptic installed its fibre directly into the communications hub on each marina and then connected each residential boat via CAT5e cabling.

There are 150 berths in the South Dock and 50 berths in the Greenland Dock. All residents now have the option to subscribe to Hyperoptic's full product suite, including 20Mb, 100Mb and 1Gb broadband and landline packages. So far, over 50% of residents have ordered services.

Patrick Keating, Harbour Master, Southwark Council, said: "It was fantastic to be able to address the residents' broadband issues with such a solution. It's an issue that I have been investigating for a while. I never envisaged a jump from nothing to a gigabit. The residents are thrilled."

Stephen Waddington, Resident, Greenland Dock, added: "Mobile signals are flaky on a steel hulled Dutch barge and teens quickly exhaust data plans. The dock is on the opposite side of the river for Canary Wharf but lacked its data infrastructure.

"Having a high-speed fibre optic solution to the pontoon means we have better broadband than a lot of people in the UK have in their houses."

The announcement that Daisy and Toscafund Asset Management are in advanced discussions over a possible takeover of Phoenix IT Group bear out comments made by Philip Carse, Principal Analyst at Megabuyte, when Daisy Chairman Matt Riley made moves towards taking Daisy private late last summer.

At the time Carse said: "One clue to what Daisy may seek to do if privately owned comes from the other UK comms holdings of its backers - Phoenix IT and Six Degrees. A combination of the three would create a £600m UK business comms and IT player, behind only BT and Vodafone/CWW."

In a statement today the board at Northampton-based Phoenix informed investors that it had been approached by Daisy and Toscafund with a recommended cash offer for the entire share capital of the company at a price of 160p per share.

Daisy has confirmed to the board of Phoenix that it has completed its due diligence and is well advanced with the finalisation of the necessary financing arrangements.

In accordance with rules on such matters Daisy must announce a firm intention to make an offer for Phoenix or announce that it does not intend to make an offer.

Daisy Group, which is headquartered at Nelson in Lancashire, is now in private hands after leaving the AIM growth market in January 2015.

Exponential-e's expansion campaign is gathering momentum fuelled by double-digit revenue growth, topping £60.6m, with total revenue increasing 22% for the year ending 31st January 2015.

The cloud and connectivity provider also reported EBITDA up 39% to £10.2m and pre-tax profits up by 89% to £4.5m.

Now in its 12th year the company plans to invest 10% of earnings into research and development and international expansion.

This development follows three key hires: The appointment of Jonathan Bridges as Head of Enterprise Cloud, Maria Cappella as COO, and most recently the onboarding of Michala Hart as Head of Channel Strategy.

She boasts 20 years experience in channel building for telecoms companies including Teleglobe, PCCW and NTT Communications.

Part of her remit is to drive the adoption of cloud services by channel partners while growing Exponential-e's channel business.

Hart will also oversee the relaunch of Exponential-e's new channel partner portal designed to help partners better engage with the company.

Lee Wade, CEO, said: "Our financial strength and success over the past year is a great reflection on the people in our business.

"As we aim to grow our workforce by 29% over 2015, we will be looking to foster talent among our new recruits by hosting our eighth training academy."

Underlining Exponential-e's people-first approach, Cappella added: "We have joined the Institute of Customer Service (ICS) and put employees through customer service training, offering them a chance to gain ICS accreditation so that we can achieve our objective of being a truly customer-centric organisation."

Exponential-e services over 1,900 companies across the UK and was included in Investec's listing of 2014's Mid-Market 100 Companies.

HighNet's incoming Sales and Marketing Director Paul Gibbs quickly got to grips with plans to almost double revenues in four years, from £11 million to £20 million.

"My remit is to over-achieve on this figure through deeper partner engagement, strategic partner recruitment, growing our brand and social media presence and broadening our UK footprint," stated Gibbs.

He was attracted to HighNet by its 'boutique’ sales and service offering whereby channel managers engage directly with partners on particular opportunities.

"This is underpinned by HighNet being a family run business with strong values, which I share," added Gibbs, who joined the firm in May, moving from Gamma where he was Head of Channel for five years.

"I join HighNet in its 20th year and intend to use my experience to help nurture the business even further and help the board realise its ambitions for growth," added Gibbs.

Resellers can spend more of their valuable time selling solutions to end users and building their businesses following the launch of a liberating back office support service by Nine Wholesale.

Called Virtual Office, the service is offered at various levels with full white labelled back office support, including access to trained billing and provisioning administrators, professional customer service with call answering and message taking, the resolution of complex customer billing enquiries and end-to-end fault management.

Virtual Office is powered by a team of customer service agents based at Nine Wholesale's Gloucestershire HQ and headed-up by Vicki Cowperthwaite.

Nine Wholesale MD Nick Webster said: "We're excited about launching Virtual Office to the channel. The service releases time for resellers to get out of the office and make those all-important sales.

"Feedback from our trial-run resellers has been positive and demonstrated both time and clear reductions in staffing costs."

A knowledge gap about the benefits of Disaster Recovery as a Service (DRaaS) represents a big opportunity for resellers according to Darren Hilton, Director of Partner Services at Timico.

His call to action follows a survey by the firm that found a barrier to adoption is the perception that DRaaS is prohibitively costly, which is not the case.

Over a quarter of those asked said that the biggest barrier to sign off on disaster recovery plans was a perception that it would be too expensive, with a similar amount believing that the financial return was minimal.

"This lack of knowledge presents the perfect opportunity for the channel as it allows resellers to tap into a market which may believe disaster recovery just isn’t an option for them," he said.

"Successful reselling is all about staying ahead of the curve, so it pays to keep pace with industry developments and relay these to the end users.\"

The survey also found that over 60% of SMEs had not yet rolled out any form of cloud-based back up within their business.

"Ever since IT environments have been virtualised, disaster recovery has become an essential part of the IT manager’s remit," added Hilton.

"However, there’s still a perception that disaster recovery solutions are cumbersome and expensive, when in fact the cloud has allowed solutions which are cost-effective and easy to implement as well as safe and secure."

A Higher UC Apprentice Scheme introduced by Freedom Communications one year ago has won the Excellence in People Development award at the Herts Chamber of Commerce's Inspiring Hertfordshire 2015 gala dinner.

The scheme provides a bespoke Higher Apprentice framework and qualification and offers Freedom's existing workforce the opportunity to future-proof career prospects through the development of new technological skills.

The is part-funded by Government and backed by local Members of Parliament.

Designed to be scalable for UK-wide adoption, Freedom will now enter the Apprentice Scheme into the National Inspiration Awards.

Freedom's Operations Director, Lisa Clark, said: "Having invested heavily in our Apprentice Scheme, not just financially but also in terms of energy, passion and time, we are delighted to receive the Excellence in People Development award.

"We believe that this truly does recognise that we're cultivating a unique technical workforce, helping to drive both business and economic growth."

Pat Botting, Freedom's MD, added: "Throughout our 26 year history, communications technology has evolved from traditional telephony to the new world of Unified Communications.

"Having seen that during this transition new skills within the market did not also develop, we made the strategic decision to address this with the launch of our own UC Apprentice Scheme.

"We are thrilled that both our approach and commitment to our people has been acknowledged with this award win."

4G is rapidly gaining share surpassing 50 percent of the global handset market generating a new Q1 record of $96bn in sales according to data from Gfk.

In the first quarter of 2015, global smartphone unit demand increased +7 percent, compared to the same period last year. Sales reached 310m units, with growth down from +19 percent year-on-year in Q4 2014. This slowdown was caused by a year-on-year decline in demand for smartphones in China and Developed Asia, down -14 percent and -5 percent, respectively.

Smartphone sales value in Western Europe declined on a year-on-year basis for the first time in Q1 2015, dragged down by Spain and France. As smartphone penetration nears saturation point, both countries are expected to see a slowdown in smartphone unit growth this year compared to 2014.

In Central Europe, the macroeconomic situation in Russia has significantly impacted sales. As a result, GfK forecasts that 2015 smartphone demand in the region will grow more slowly than Western Europe for the first time since 2010.

Kevin Walsh, director of trends and forecasting at GfK comments, "The weakness in China was caused by a significant slowdown in 3G demand, which was not offset by 4G growth. We forecast China to return to growth in the second half of the year, driven by a continued 4G ramp-up. In Developed Asia, the year-on-year decline was caused by tough comparisons with Q1 2014, when demand was pulled forward in Japan due to an upcoming VAT increase in April. We forecast unit demand in Developed Asia to grow by +3 percent year-on-year in 2015, driven by Japan and South Korea, which are expected to return to growth in 2Q15"

The 4G ramp-up
In Q1 2015, 4G unit share surpassed 50 percent of global smartphone demand for the first time. China saw the greatest 4G share increase in the quarter - up 16 percentage points to 73 percent, from 57 percent last quarter. Growth has been buoyed by the continued price erosion of 4G smartphones. GfK forecasts global 4G share to increase further in 2015, reaching 59 percent in Q4 2015.
Smartphone growth in India and Indonesia is also expected to be helped by an expanding 4G network. In Q1 2015, 4G share in both countries was well below the global average, at 4 percent and 7 percent, respectively. GfK forecasts 4G unit share within smartphones to reach 7 percent in India and 10 percent in Indonesia in 2015.
 
Supersize smartphone screens
Q1 2015 saw a continued shift towards larger screen sizes (5"+), where sales of 166m units equated to 47 percent of the global smartphone market, up from 32 percent in Q1 2014. Share of large screen devices in N. America hit 70 percent in the quarter, up from 59 percent in the same period last year, driven by strong demand for high-end models. By comparison, in China, where the trend is particularly pronounced, the growth in share to 57 percent - from 32 percent in Q1 2014 - was driven by cheaper large screen models flooding into the market. GfK forecasts this screen size migration to continue in 2015, with global demand for large screen devices increasing by +30 percent year-on-year to account for 69 percent of total smartphone unit demand this year.
Price Band dynamics in Q1 2015

Low-end smartphones - those priced in the region of $0-250 - increased share to 56 percent, up from 52 percent in Q4 2014, at the expense of the high-end models ($500+), whilst mid-range ($250-500) share remained stable. GfK forecasts low-end smartphones to gain further share in 2015, helped by continued price erosion in emerging markets.

Walsh continues: "GfK forecasts global smartphone unit demand to grow +10 percent year-on-year in 2015, a slowdown from the +23 percent growth experienced last year. Emerging Asia is forecast to be the fastest growing region, driven by India and Indonesia, where low smartphone penetration leaves plenty of room for growth.