Comms Dealer

Rainbow Global Network Services has acquired the customer base of mobile company 3G Ltd for an undisclosed sum. 3G has been providing mobile hardware and mobile solutions to the business community since 1989. The company, based in Sussex, offers a range of mobile products including handsets and tablets, and provides voice and data packages across all the major network carriers.

Rainbow MD Dave Corgat commented: "The acquisition of the 3G Ltd customer base is part of our strategy to build the mobile side of our business, both organically and through acquisition.

"It is something we have been pushing for the past 18 months, partly via the integration of mobile with our other services, and partly by expanding our data service portfolio into the mobile market."

David King, MD of 3G, added: "We have been trading in this industry for over 25 years and as you can imagine have seen tremendous changes both in product and service. We have built a sound business and consider many of our customers to be friends.

"However, Rainbow offers such a wide choice of services which more and more need to be linked up to mobile and the whole mobility piece, and with its skill sets and the flexibility of its billing platform we believe our customers will be better served."

Nimans is reporting a 70% hike in Microsoft Lync end point sales as growth in Unified Comms technology continues to accelerate.

"The continued growth of MS Lync has triggered a huge rise in associated end points," said Nimans' Head of Category Sales, Paul Burn. "So far this year we've seen sales rocket by 70% as we help more and more customers obtain manufacturer accreditation through comprehensive day-to-day support.

"UC is being adopted by UK businesses at a significant rate which in turn accelerates demand for high quality optimised end points. Helping customers choose the most appropriate devices is one of the most crucial components of any deployment. That's why we launched an informative guide that combines specialist advice with a product overview, focusing on all the key areas."

The company says that even if resellers are not selling Lync software, there's still a great opportunity to supply end points such as headsets, telephony and audio and video conferencing.

Jabra is providing fully integrated call-control with the new Cisco Jabber 10.5 release for Windows.

The 'built-in' Jabra driver will allow for seamless installation without external drivers to complicate a mass-deployment, said the firm.

As a Preferred Solution Developer, Jabra works with Cisco to deliver Unified Communications.

Nigel Dunn, Managing Director, Jabra Business Solutions UK & Ireland, said: "With full compatibility to Cisco 10.5 Jabra shows that we remain dedicated to enhancing the user experience by continually developing audio devices that allow customers to appreciate full Cisco collaboration and increased productivity."

New Jabra EHS Cable for Cisco IP Phones
The new Jabra LINK 14201-41 EHS cable for use with Cisco Unified IP deskphones 8941 & 8945, enables connection and provides handsfree remote call control with Jabra PRO 920 & 925, Jabra PRO 9400 and Jabra MOTION Office wireless headsets, all from up to 150 metres away from the desk.

The Jabra LINK 14201-41 also has the added advantage of being software upgradable via Jabra PC Suite firmware updates to ensure it always offers the latest functionality at no extra cost.

As Cisco 8941 & 8945 deskphones are widely deployed, with an estimated 900,000 in use in the market today, the Jabra LINK 14201-41 EHS cable is an accessory for anyone using a Jabra wireless headset.

This connection cable is now available to order from all authorised Jabra partners.

Mitel's financial statement for Q2 ended June 30th showed the addition of 53,000 recurring cloud seats added in the quarter, up 98% year-over-year.

Strong cash generation enabled another voluntary prepayment of $25 million against credit facility.

"Mitel emerged from the second quarter with record reported quarterly revenue and global market momentum that enabled us to beat consensus and deliver consistently strong financial results through the first half of the year," said Richard McBee, Chief Executive Officer.

In the second quarter Mitel continued to see strong cloud growth, installing 128,000 new cloud seats during the quarter including the impressive 53,000 recurring cloud seats, taking Mitel's total installed cloud base to 754,000, up 75% year-over-year.

Total revenue increased 97% to $288.7 million from second quarter 2013, primarily as a result of the Aastra acquisition.

Gross margins were 52.6%, down from 55.0% in the prior year, reflecting the acquisition of Aastra, which was a lower gross margin business.

Net income was $0.8 million compared to net income of $2.7 million in the prior year, driven principally by the integration costs related to the acquisition of Aastra.

Adjusted EBITDA was $38.8 million compared to $21.4 million in the year ago period, due to a combination of EBITDA growth from the legacy Mitel business and EBITDA resulting from the acquisition of Aastra.

Non-GAAP net income for the second quarter of 2014 was $22.2 million, or $0.21 per diluted share, compared to $9.9 million, or $0.18 per diluted share in the second quarter of 2013. The number of non-GAAP weighted-average common shares outstanding was 103.7 million and 56.3 million, respectively.

Operating cash flow for the quarter ended June 2014 was $25.8 million compared to $25.3 million in the quarter ended June 2013.

Cash and cash equivalents as of June 30, 2014 were $134.2 million.

Dutch telecommunication company KPN has bought a hosting specialist Argeweb which specialises in domain registration, web hosting, hosted exchange and online-storage services for the SME sector.

The acquisition is in line with KPN's strategy to grow towards cloud hosting, it says. Through this move, KPN will also collaborate with Argeweb's sister company Amsio which ensures KPN the access to the Microsoft Azure Pack.

In the Netherlands Argeweb provides hosted exchange and Argeweb cloud virtualisation platforms for the small and medium business market. It has over 50,000 customers and offers nearly 200,000 domain names while KPN serves 150,000 customers in the business segment with 250,000 cloud services and hopes to grow its share in the cloud market.

After the acquisition, Argeweb will become a part of the KPN Cloud team and will be led by Koen van Deudekom.

"Argeweb is one of the largest and most successful hosting companies in the Netherlands. Through this acquisition we will increase our market position and scale in this fast growing market," says John van Vianen, CEO KPN Business Market.

Although it beat Q4 estimates, Cisco shares fell 2% after it said that carrier sales were down 11%. It was also hit by weak demand in emerging markets, particularly Russia, down 30%. Cisco had planned a $1bn investment here, but confidence is falling.

EMEA grew 2% as it saw 'continued relative stabilisation across Europe', noted CEO John Chambers. In EMEA, enterprise business grew 8% and commercial grew 7%. Leading the way, the UK grew 6% and within the UK commercial was up 18% and enterprise was up 19%. Germany in this most recent quarter grew 16% and again within Germany it was similar: commercial was up 13% and enterprise was up 17%.

Chambers said: "In the UK and Germany we are seeing similar success in these marketplaces as we begin to move to selling architectures, then solutions, then business outcomes. This is the transformation we're working onto drive more broadly. Just to give you a sense of an emerging country's impact on EMEA as an example and its growth excluding Russia which declined 30%, EMEA would have grown 4% instead of 2%."

Enterprise business was up over 9%, with a similar strength in commercial up over 8%, while the public sector on a global basis was flat.

Challenges continue in the service provider market which declined 11%.

Within the service provider market the largest impact came from continued decline in video with orders down 13% and the ongoing decline in emerging markets where service providers are more of the business.

"Our service provider customers are dealing with transitions in their own business and have been aggressively consolidating with the transaction volumes of these consolidations over the last 12 months about as much as we have seen in the past four years combined."

Westcon is running a series of roadshows in the north of England and Scotland from 11th September to 2nd October, offering demonstrations and presentations from its vendor partners with new product launches from Avaya, Audiocodes and Snom.

"Places at the roadshow are getting booked up fast," said John Richardson, UK Marketing Director, Westcon UCC.

"As Unified Communication and Collaboration solutions are increasingly becoming more complex and consist of multi-vendors, it is becoming more challenging for resellers to stay ahead of the game.

"This event is an opportunity for resellers to see how Westcon works with the 'best of breed' vendors and how we simplify deployments and add value."

Supporting vendors at the event include Polycom, Sonus, Plantronics, Extreme, Snom and Avaya.

Exertis Micro-P has secured an exclusive UK distribution deal for global technology smartphone brand Asus which is launching three new 3G devices into Britain (the ZenFone 4, ZenFone 5 and ZenFone 6). A 4G device is set to launch in September.

Further smartphones for the high-end segment will be available in the first quarter of 2015.

The deal builds on a long history of partnership between the two companies in other product areas including tablets, netbooks and desktops computers.

Asus Sales Director Steve Hope stated: "We are committed to building a strong mobile business and have a roadmap of future products planned.

"We entered the smartphone business with innovative high end products in the PadFone tablet-come-smartphone series. These products have now been accepted by the market, and so Asus has now reached the right time to begin selling mainstream models."

Asus released ZenFone 4, ZenFone 5 and ZenFone 6 into China and its home-island, Taiwan, at the beginning of the second quarter this year, where pre-orders outstripped supplies.

The planned European launch was delayed until now to allow production to catch up with consumer requirements.

ASUS Product Manager, Anand Unadkat, said that the successful launch of the company's smartphones in Asia has already bought the business' shipment targets for the year well into reach.

"We launched in India in July and within four days shipped 40,000 units and have shipped 200,000 ZenFones in Taiwan," said Unadkat. "Our devices are now available in Sweden where we launched last month, and as of today the UK, with the help of Exertis Micro-P."

Daisy founder and CEO Matt Riley (pictured) has made a tentative take-private approach for the business at 190p per share backed by investors Toscafund and Penta Capital. Philip Carse, Principal Analyst, Megabuyte, 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."

Matt Riley has built Daisy into one of the larger independent B2B comms service providers in the UK through the initial reverse into FREEDOM4 (the ex-Pipex) in the Summer of 2009, associated with an £83m fund raise at 80p per share, and then 20-25 subsequent acquisitions. The share price fluctuated within a 90-110p range until early 2013, before rising in line with peer group multiples, reaching about 205p at the end of 2013. It fell back to just under 140p but has since recovered to 175p.

Carse added: "The announcement says that institutional and private equity investor Toscafund approached Daisy at the end of July on behalf of the consortium. Toscafund has been a long standing shareholder of Daisy, owning 28.5% (not much less than the maximum it can do without triggering a bid), whilst Matt Riley owns 23.0%. The third consortium member, Penta, is a private equity investor; its stake, if any, in Daisy is unclear.

"A 190p offer would value Daisy's equity at about £490m, giving an enterprise value of £600m, or about 10.3x current year consensus EBITDA. This is comfortably above the 6-9x of most of its UK B2B peers, though below Alternative Networks M&A-boosted 13.2x (though still 11.3x financial year 15)."

More analysis by Philip Carse, Principal Analyst, Megabuyte
The official motivation for the take private is unclear, but we believe this is certainly not the first time that Daisy has been subject to such an approach. Whilst Daisy's share price has slightly more than doubled over the last five years, it has lagged some peers, including Alternative Networks, whose shares have more than quadrupled over the same period and it may be that Matt Riley would prefer to drive the company through its next phase away from the glare of public markets.

The original expected exit to a larger UK strategic has yet to materialise, with two obvious buyers - Vodafone and CWW - combining in 2012, and a rumoured approach earlier this year from Virgin Media coming to nothing.

A clue to what Daisy may do as a private company comes from its private equity backers. Toscafund has amassed a similar 28.1% holding in Phoenix IT in recent times. Matt Riley has often spoken of his desire to create a substantial mid-market converged telecoms and IT player, and the acquisition of Phoenix would certainly accelerate that process, increasing Daisy's £360m revenues and £58m EBITDA run rate by £221m (61%) and £27m (47%).

Indeed, there were rumours circulating a view months ago that a Daisy/Phoenix merger was in the offing. A merger would undoubtedly unlock significant cost synergies and potentially help resurrect Phoenix's fortunes (Phoenix IT generated £50m of EBITDA back in the year to March 2011), and would probably not be that expensive given Phoenix's current 4.9x EBITDA valuation, but would involve the mother of all integration challenges.

Meanwhile, Penta is the backer of privately owned Six Degrees, having sold its previous telecoms venture - SpiriTel - to Daisy in November 2010. The SpiriTel management team has created Six Degrees into a much more data, connectivity and hosting-focused provider than SpiriTel, and would add some strong, complementary capabilities, and growth drivers, to Daisy. Estimated run rate revenues and EBITDA of £70m and £14m would add about 19% and 24% to Daisy.

A combined Daisy/Phoenix/Six Degrees would have revenues and EBITDA of £650m and £100m before synergies, similar to Virgin Media and behind only BT and Vodafone/CWW in the broader-based fixed and mobile UK business comms market. 

Nimans is urging more resellers to use leasing to take greater control of their customer bases.

"One of the most important areas that often gets overlooked is how leasing can help resellers lock-in their customers over a long period of time," said Head of Dealer Sales, Tom Maxwell.

"There's no worries about cash price discounts that can erode margins and they also have greater control over a customer where they can upgrade or add additional equipment further down the line."

Nimans has launched an educational marketing campaign to help resellers understand the 'hassle free' way they can use leasing to grow their businesses.

Maxwell added: "There are still a lot of resellers who view elements of leasing as complicated. They don't want to embrace it and only go after cash deals which very often ends up with a price discount and loss of margins. We offer a free lease desk which takes away all the pain of paperwork and liaising with different lenders etc.

"Many resellers are very good at selling leasing but others are a bit frightened of it, particularly at the end of the deal about who owns the kit. We want to soothe their fears and show them how to remain in control."