Mobile phone group O2 looked at buying the loss-making telecoms operator Perlico as a route into the expanding market for broadband. However, talks about a deal ended inconclusively a number of weeks ago. Arthur Beesley, Senior Business Correspondent, reports.
Perlico is a minor player in the telecoms sector, but a deal would have given the mobile phone group instant access to the rapidly-expanding broadband market in the Republic at a time when its mobile business offers only modest opportunities for growth.
O2, which has about 1.6 million mobile subscribers, declined to comment yesterday. According to soucres, the talks did not reach an advanced stage.
The dialogue with Perlico is seen as a clear indication that the group - which is owned by Telefonica, the Spanish telecoms group - would like to enter the market for broadband.
Perlico's finance director, David Manifold, declined to discuss the company's contact with O2 but said that the business was not for sale.
"We're focused on our own strategy. We're focused on organic growth. There'd be absolutely no need for us to think about disposing of the business at this stage," he said.
While Mr Manifold said that Perlico was taking the benefit of "unbelievable growth" at present, the latest abridged accounts for Perlico Communications Ltd show that it had accumulated a deficit of €1.16 million in its profit-and-loss account by the start of 2005.
The company lost €992,069 in 2004, but it had finalised an equity investment of €1.49 million during the course of last year.
Perlico's shareholders include chief executive Iain MacDonald, chairman Malcolm MacDonald and directors Dr Jim Mountjoy and David Martin.
Other shareholders include Goodbody Stockbrokers and the businessman Gene Murtagh of Kingspan plc.
O2 was involved several months ago in a dialogue with the supermarket group Tesco about the possibility of a mobile virtual network operator (MVNO) agreement, under which Tesco would have bought wholesale airtime in bulk from the mobile phone company and sold it on to its retail customers.
O2 is Ireland's second-biggest mobile operator, behind Vodafone.
The dominance of those two companies is under challenge from Meteor, which was acquired last year by Eircom. A key strategy of Eircom's new owners Babcock & Brown is to grow Meteor aggressively.
