Racal Electronics Plc duly announced yesterday that it had conditionally agreed with the British Railways Board to take British Rail Telecommunications Ltd off its hands for ú132.75m, and revealed that it plans to become a carrier’s carrier rather than offering telecommunications services direct to end users. The acquisition will expand its existing managed telecommunications business and it will also offer capacity to new carriers. It is already in talks with foreign telecommunications operators keen to move into the UK market, it said, naming AT&T Corp and Nynex Corp, although the latter was understood to be close to a broad-brush agreement with Cable & Wireless Plc and its Mercury Communications Ltd unit. Current use of the network – principally by Railtrack and British Rail, accounts for only around 20% of its capacity, so while they will continue as customers, there is copious spare capacity to exploit, although Mercury and Vodafone Group Plc already speak for some of the capacity. The purchase will also mean that Racal’s existing managed network business, including the Government Data Network and the Camelot Plc lottery network – will need to use fewer lines leased from British Telecommunications Plc, enabling it to make keener bids for future government and private sector managed network contracts.The purchase price will be financed from new banking facilities.The unit, which employs 2,800 staff, will become a separate subsidiary within the Racal Network Services Group. It has 6,875 miles of trunk cables and 10,000 miles of distribution cable and made a pre-tax profit in the year to March 31 of ú17.6m on turnover of ú174.2m. Racal shares rose sevenpence to 277.5p.
