UK telco Energis has acquired one of the country?s last independent Internet Service Providers (ISP), Planet Online, securing it a place in the lucrative Web market.
Energis will bag Planet Online, which offers Internet connectivity, Web hosting and managed Intranet services, for #75 million. The telco already carries around 40 per cent of the UK?s Internet traffic and has been hunting the ISP market for some time for a suitable purchase.
?We saw how there has been an alignment of telcos and ISPs and we chose Planet as it has a strong business focus and is actually making a profit - something of a rarity with ISPs. Basically it was the best of the bunch,? said Russ Armstrong, director of information systems at Energis.
Analysts predicted that as the ISP market matures, smaller companies will seek to partner with firms that allow them to provide value added services. The price of the service will cease to be a concern as service, in particular bandwidth and reliability become the overriding concern.
The purchase of Demon Internet by Scottish Telecom for #66 million in May set this trend.
?It makes sense,? said Daniel Bieler, Internet and new media consultant at research firm Ovum. ?It reconfirms that convergence of different types of technology is the way the market is moving. It is a natural growth, both companies focus on the business sector and have a UK culture.?
Bieler also praised the deal saying that it can only lead to a better product, as Planet will be able to take advantage of Energis? strong backbone, and ATM and frame relay technologies.
?If an ISP has a strategic alliance with its backbone supplier it will be able to guarantee quality of service to its customers. We will see an increase in the quality of Planet Online?s service,? he said.
Planet Online will become a wholly-owned subsidiary of Energis with Peter Wilkinson, Planet?s managing director acting as consultant, and John Beaumont Energis? strategy and business development director taking over as managing director.
Said Wilkinson, ?The nature and role of ISPs is evolving to meet the ever increasing demands for complex, internetworking solutions. Increasingly, this requires integration with a telecommunications operator. Energis? proven advanced broadband network and business market focus make it the ideal company to accelerate Planet?s growth.?
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