Carphone Warehouse picks up Onetel for £132m

Competition picks up in fixed-line space...

Carphone Warehouse has plumped up its fixed-line telecoms business with two acquisitions today.

The mobile phone retailer is buying Onetel, the phone business of British Gas-owner Centrica, for £132m in cash. The deal gives Carphone Warehouse 1.2 million UK customers and moves it toward its goal of becoming "the number one alternative residential telecoms provider in the UK market". If Centrica provides a set amount of additional customers, Carphone will pay an add £22.2m to the sale price.

Carphone Warehouse said in a statement: "The acquisition of Onetel propels us clearly towards that position and gives us a substantial platform of profitable voice customers from which to launch our drive into the broadband market in 2006."

Carphone Warehouse joined the bidding war for Onetel in September. At the time the price was estimated at a much higher £350m to £450m but reportedly fell because a number of telecoms businesses have been up for sale this autumn.

The retailer has also bought the UK fixed-line operations of Swedish telecoms operator Tele2 for £8.7m.

Together the deals will give Carphone Warehouse around 2.5 million phone service customers, more than double the number of customers using its TalkTalk fixed-line service. Onetel's residential customers will be moved over to the TalkTalk service while its 50,000 small business customers will be merged into its Opal business services unit

The acquisitions pit Carphone against incumbent BT in an increasingly competitive space.