Telefonica sells Manx Telecom

Manx Telecom, the Isle of Man telephone service where 3G phones were first trialled and launched back in 2001, has been sold.

Telefonica, owner of the O2 network in the UK, has sold the business for £158.8 million to private equity group HgCapital and CPS Partners, an international telecoms management consultancy.

Telefonica said Manx was not a core business which fitted into its financial plans.

Matthew Key, chief executive of its UK and Europe business, said the deal was good for all parties including Manx's 300 staff and Telfonica's shareholders, many of whom are still former O2 investors.

The business had revenues of £69 million and made operating profits of £25 million.

Alex King, head of telecoms, media and technology at HgCapital, who led the deal, stated: "While economies across Europe continue to be in a state of flux, the Isle of Man has proved an excellent base for companies, boasting over 25 years of unbroken GDP growth.

"It has a diversified economy coupled with an educated and skilled workforce. Furthermore, the Isle of Man has invested heavily in electronic services, for which the island has achieved a global reputation."