PowerGen is to launch the UK’s first packages of gas, electricity, telecoms and Internet services backed by a £5m marketing spend, following its deal with Affinity Internet Holdings, the UK’s third largest Internet service company.
The electricity generator has paid £10m for a 50 per cent stake in Affinity’s telecoms subsidiary TeleCentric Solutions.
The joint venture will enable PowerGen to sell a range of bundled utilities services, including fixed and ultimately mobile telephony to its 2.6 million customers and to Affinity’s 1 million subscribers, combined on a single bill that could be accessed through the Web.
Packages of services sold through PowerGen will carry the PowerGen brand, while products sold through Affinity’s existing Internet deals, with companies ranging from Egg, Tiny Computers and Arsenal Football Club, will carry those names.
Mike Wagner, PowerGen retail managing director, who was poached from BT in July, has masterminded the deal.
He says: “There is a real need to simplify these home services and an opportunity to add value to what we offer customers.”
He says that there is “a very strong possibility” that the joint venture company will be spun off and floated separately in the next two years.
Wagner aims to attract 100,000 customers to the new packages of services by the end of the year.
He plans to offer incentives – possibly cash back – to persuade customers to sign up, and says direct marketing will play a major role in attracting customers.