Hi

Following on from the nice link the Reg had provided it turns out that Homechoice customers, yes each and every one of you, have cost over £7,000 to acquire

http://www.officialspin.com/main.php...ecent&rid=1062

Indicates at least £310 million had gone through the books at Homechoice between 2000 and 2002.

http://www.officialspin.com/main.php...recent&rid=540


To financial year end April 2005 Homechoice reported losses of £46.5 million, to year end April 2004 losses of 1.5 million.

Just from those Homechoice have since 200 bled £358 million in red ink.

So be happy, Homechoice have spent over 7 grand on you!

Not going into the 'debt for equity' cable stylie swap either.

Homechoice have a lot more in common with cable than I gave them credit for, just on a smaller scale, and without the bits of glass and copper in the ground.

Homechoice had 0 customers after they closed down the service before the relaunch. The company was refinced and shareholders were wiped out.
Homechoice is basically a different company. Chris Larson invested £100m to get all the shares.

You can't include the expenditure from from before then because those customers basically no longer exist.

Given that HC are just about to be merged, you will have to stop talk about
HC and slag off Tiscali instead. Tiscali got e250million investment a couple of months ago BTW, before you start.

I should have known that a light hearted commentary would meet with your disapproval. I really shouldn't have clicked the 'View Post' button there and left it ignored.


You were yesterday, when it suited, slagging off Tiscali, their financial state, and the standard of service they provide their current customers. Now it's looking very much like they are going to be running your services I see you are stepping up to the plate to defend them.

I'm fully aware that Tiscali UK is carrying the rest of the Tiscali group. I'm also aware, as I'm sure you are, that Tiscali retail have customer services in India, dubious billing, dubious services all around.

It will be very very interesting to see how the pile high, sell cheap, low quality service from Tiscali combines with the much smaller, higher quality service from Homechoice.


I can include what I want, thank you.


I would put his investment at the same level as Bill Huff investing in the bonds of the cable companies in order to obtain control. It seemed more like a debt for equity swap.

In any case, academic, it was a light hearted thread by design. Kinda ruined now.
Last edited by BBRealist : 11-08-2006 at 17:07

Lets not forget that Chris Lanham is loaded - seriously loaded and Homechoice is a lovely little tax loss for him.

Even with all the above considered - the acquisition cost of a single customer does not meet £7,000 (pre or post Chris Larson)

The figure is £2000, the price paid per customer. Chris Lanham invested 100million and thats basically what he's getting in shares. He hasn't made a loss so he can't put it against tax.

BT charge wholesalers around £70 pounds to connect a customer using LLU, and so I doubt if the cost for a sale, set top box and an installation visit equates to £1,930.

Marketing, R+D, staff, power, etc, etc, etc?

You didn't even get the connection fee right.

All those costs (marketing, support, R+D) will be removed from the valuation, as Tiscali already has to pay for that.
The value is simply the additional cost of each customer taken away from the income of each customer, ie the base profit, multiplied by the expected annual return. Companies expect to make 5-10% per year (dependant on base interest rates) so a multiplier of 20-10 times is subjected to the cost.

Therefore if each customer is worth £2000 a 10% return would need £200 profit per year and 5% would need £100 per year.

Tiscali's current customers are valued at about £450 each.
The effect of this can be seen that Tiscali are making a small profit with 1.1 million customers whereas Homechoice's breakeven point is estimated to be around 100k customers.

You can see why Sky is in such a powerful position, its customers are very profitable and it has millions of them. The barrier to entry is the £billions required for the satellites and content rights.

Not sure where you're getting your figures from or if your calculator is broken - so then let's agree to disagree

"Homechoice had 0 customers after they closed down the service before the relaunch. The company was refinced and shareholders were wiped out."

i doubt the validity of the above statement by peter we, i have had continual service minus some outages for 7 years now

The activation cost came straight from BT's price list.

I know, but the figures were extreemly small

as i pointed out the statement was incorrect