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Carphone Warehouse has launched its aggressive free broadband offering, bundled with fixed-line voice calls. The move, which has got bloggers all fired up, will see Carphone invest £110m in broadband over the year as it does everything it can to grab land from BT while its dominant rival remains hamstrung by the regulator. We’ll look closely in tomorrow’s paper at the impact Carphone’s move will have on others in the industry. Carphone shares are flat but BT’s are off 2 per cent. Analysts at Credit Suisse believe Cable & Wireless’s Bulldog may be the hardest hit, however, since its offering is the most comparable but without the brand strength or distribution platform. There are interesting views on how Virgin and Sky might respond at Silicon.com, where there is also a discussion about whether “free” is actually free. One blog, GigaOM, detects echos of the “go-go nineties”.
Great sales figures from Marks and Spencer. Fourth quarter sales jumped 6.8 per cent, which, although flattered by the comparison with very weak figures a year ago, was better than the market had expected. M&S shares are up 4 per cent today at 587p. Expect plenty of analysts’ upgrades.
Streuth. Scottish & Newcastle is buying the Foster’s brand in Europe, Russia and about eight other former Soviet countries for about £309m. Sounds expensive. S&N was paying about £15m a year to brew Foster’s under licence, but analysts reckon it was probably worth double that. So, now S&N is in effect paying for 20 years upfront and on top of that Foster’s is giving up sponsoring Formula One, from which S&N benefited nicely. There has been some muttering in the newsroom about how this deal may make S&N less attractive as a takeover candidate, but that line may need more work. S&N plans to raise £210m through a placing of shares through an accelerated bookbuild by Deutsche Bank and UBS.
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