Macquarie deliberates sale of KCOM 


Australian investment banking firm Macquarie, owner of Hull-based operator KCOM, is considering putting the company up for sale, according to a report from The Telegraph

The bank has appointed advisory orientated investment bank PJT Partners to undertake a strategic review of KCOM, which could lead to a sale or merger. 

Back in August 2019, Macquarie finalised the deal to acquire KCOM with a £627 million cash offer. The operator was subsequently taken off the London Stock Exchange. 

According to The Telegraph article, CityFibre and Virgin Media O2 are among potential companies that could snap up the Yorkshire operator, although no decision has been made. As the telecoms market continues to succumb to consolidation, however, the sale price is expected to be significantly lower than when Macquarie made its purchase. 

Hull is the UK’s only city that is not served by BT’s open reach network. When KCOM was founded in 1904 as Hull Telephone Department, it was one of few local authorities permitted to run its own telephone network through a licensed grant. All of these local networks (apart from Hull’s) were gradually absorbed into the Post Office Telephone department, which later became BT. Hull refused this, and have since operated independently–which is the reason why Hull and surrounding villages have cream coloured phone boxes, not the traditional red. 

KCOM has long been accused of being a monopoly. Ofcom legally requires the company to allow other companies to use its infrastructure, but these other companies would have to install their own equipment in KCOM’s exchanges and employ their own engineers, which is obviously costly. New entrants the market such as MS3 and Connexin have been attempting to challenge this through building out their own infrastructure, which in some cases has angered local residents, who disagree with the construction of more infrastructure. The feud has become an ongoing political issue.  

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