20:20 Mobile’s shared ownership with Vodafone Ireland of 20:20 Mobile Ireland looked like a licence to print money. Why then was it so eager to sell?
The rumour last week was 20:20 Mobile Group has sold its 51 per cent in its 20:20 Ireland joint venture with Vodafone to free up cash. It seemed strange.
20:20 Ireland has consistently appeared like an ace in the hole for the 20:20 Group, especially as its UK business has been forced through a transformation under private equity ownership and a
squeezed UK landscape.
Of course, Ireland has also got 20:20 in trouble with Nokia in the past, but it was considered by the market almost a way for it to print money.
A joint venture with Vodafone? No two-year tenders, no battering on margins? Guaranteed supply? Forever?
As it turns out, Vodafone jumped first. One must suppose Vodafone Ireland’s move is symptomatic of a broader Group instruction to take distribution in house and centralise it.
That was the sense of Vodafone’s removal of Data Select in the UK for web fulfilment, the choicest contract in Data Select’s roster; something Vodafone is understood to be in the long process of
winding down.
In fact, rumour last week was Vodafone had run the rule over an outright purchase of Data Select as a vehicle for its pumping third-party dealer sales.
It was a rumour twinned with Brightstar interest in Data Select too. Nothing came of that either, and of course it has done the rounds before.
Clearly, if every business is really for sale in this market, then Peter Jones presumably holds the business dear enough to accept only a considerable offer for it.
Anyway, that is just the gossips talking.
Developments in Ireland are interesting. Fergus deBurca and Don Maher clearly led a buyers’ market for 20:20 Ireland.
But one must wonder on what terms they agreed to the purchase, or more precisely their backers agreed to it.
Presumably there is in place at least some contract with Vodafone for ongoing supply.
The Irish market is very different to the UK. Distributors have power in Ireland. They handle all supply into high street and independent retail.
But as the demise of Sigma last year showed, firms require that essential operator contract. Sigma’s O2 deal went straight to Radius, which looks to be holding all the cards.
Likewise BPI, itself taken from Brightpoint in a management buyout by Fergus Sweeney and Barry Napier some years ago, lost O2 business to Radius. And it has the Meteor deal.
20:20 had the only other one – and it was the one to have – with Vodafone.
Sources close to 20:20 suggest the Irish business handled perhaps 300,000 units per year – of the 10 million it claims to ship globally. Perhaps then, its Irish business wasn’t essential to it,
and certainly missable without Vodafone over a barrel.
Perhaps, then, 20:20 is not cutting short its international expansion, as it seemed at first look.
20:20 and Vodafone sell 20:20 Ireland
