Pipex turnover up but profit down
The Pipex end of year results, released yesterday, for 2006 show interesting figures for the group following a spate of acquisitions and ventures. Profit before tax was down to £4.8m from £5.1m in 2005 with turnover rising by 121% to £294m from £133m.
Broadband subscribers were reported at 570,000, a 101% increase over 283,000 in 2005. The acquisition of Homecall has helped by boosting multiple service delivery where customers take, for example, a phone line with their broadband service. This has helped raise average revenue per customer to £24.70pcm from £23.00. Local Loop Unbundling rollout has not been extensive. Investment of £5.8m has seen 59 exchanges completed by the end of 2006 and another 41 are due by the end of April. A further 75 are to be installed by 2008. Tighter integration of systems following the acquisitions of Bulldog, Toucan and Homecall should help introduce cost savings by avoiding the replication of functions across the group.
WiMAX trials in Stratford-upon-Avon have shown the potential to deliver 'up to 8Mbps' of synchronous bandwidth (i.e. for both downstream and upstream) with the coverage expected to be up to around 5 km from the exchange. This sounds similar to current DSL rollouts in the UK. It does offer some improvements as the 5 km is 'as the crow flies' rather than physical cable length, and the increased upstream bandwidth may be beneficial to business customers. 50 towns and cities are expected to have the service by 2009, with Manchester the first to go live at the end of the year.
The group also pointed out that the strategic review, being conducted by UBS, proceeds to the board's satisfaction despite recent speculative press coverage. BT are the only known bidder reported to still be in the running for a possible acquisition, although a break up of the group could also be a possibility involving the sale of just the broadband customer base or perhaps the WiMAX service.