BBC News | BUSINESS | British Gas owner buys phone firm

Centrica - the company which trades under the British Gas brand - has stepped up its foray into the UK telecoms market.

Its �58m acquisition of One.tel UK means that it is now boasts the second largest chunk of the UK's domestic telecoms customers after British Telecom.

The British arm of One.tel came up for sale after its Australian parent went bankrupt last month.

Centrica has been aggressively expanding into other areas of business since the UK regulator prised opened the gas market to competition and eroded the monopoly of British Gas.

In addition to gas and telecoms, Centrica now offers UK homes electricity, the AA breakdown recovery service and the Goldfish brand of financial products.

Cross-selling

Centrica launched its telecoms operation last September through British Gas Communications, offering fixed line, mobile and internet service provision.

It is a keen advocate of cross-selling, whereby it uses its huge database of existing British customers to target them with other products.

Centrica customers
Gas 14m
AA 11m
Electricity 4.5m
Phone 1m
The firm says that its latest purchase will mean that it is the biggest reseller of telecoms services in the UK, with about one million active customers.

The UK arm of One.tel was profitable, with sales of about �100m in the last twelve months, 650,000 active phone customers and 100,000 internet customers.

"Today's acquisition is a significant step towards our target of 10% of the residential market," said Ian El-Mokaden, head of British Gas Telecommunications.

International ambitions

Centrica has also been expanding its international presence.

It has already taken a significant stake in the energy markets of both Canada and North America.

And last week it acquired 50% of a new Belgian energy firm in preparation for the opening of the markets there.

The acquisition will also give Centrica control of the One.tel brand in North America where it aims to use the same model of cross-selling as it has developed in the UK.

Centrica shares fell 2p to 214p on the news.


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