Moves for consolidation in the distribution sector has been predicted since the start of the year, and Dextra is the first major player that has been removed from the market.
It is believed that Dextra’s claw back liabilities to networks have been settled following a series of cashback collapses of Dextra’s major dealer customers, prompting a claw-back bill running into several millions of pounds.
Both Dextra and Fone Logistics have been the most affected of the major airtime distributors by the tightening in the dealer market.
They have been relatively slow to pull away from the consumer market and adopt b2b and convergence services compared to Avenir and Hugh Symons Communications. Both were dropped as trading partners of Vodafone; Fone Logistics in November 2006, and Dextra last month.
The deal allows Dextra to focus on its more successful accessories and prepay business, but it removes one potential area for future revenue, and is believed to have a bearing on the value on the group.
Fone Log MD Ian Gillespie owns 66% of the business.