"In the rich list published by The Sunday Times earlier this year, the 23-year-old Duke of Devonshire, Barron Cavendish, was valued at £1 billion, ranking 35th on the British rich list and also the richest person under 30 in the UK."
"He is young and handsome, has the title of Duke, and has amazing financial resources. You should know that less than a year ago, the Devonshire family suffered a financial crisis and was on the verge of bankruptcy due to failed investments and the accident that befell the previous Duke. When Barron Cavendish took over the family business, the family was once exposed to a financial crisis and was on the verge of bankruptcy..."
"It seems that the young duke's business talent is amazing, but I'm afraid many people have not noticed that after acquiring O2 Telecom for 6 billion pounds, and then acquiring Manchester United and Argos, Barron Cavendish has saddled himself with a high debt of more than 6 billion pounds. According to our investigation, the interest on these debts is much higher than normal levels - the annual interest rate is generally higher than 12%!"
"This means that Barron Cavendish needs to pay more than 720 million pounds in interest to those banks every year! And his entire fortune is only 1 billion pounds, which is only enough to support him for less than a year and a half... Every day when he wakes up, Barron Cavendish needs to face an additional interest of up to 2 million pounds. So it is doubtful how long he can sustain such a huge debt?"
Barron put down the newspaper in his hand. Hmm, it was The Sun again…
It's rare that they listed so much data this time, and Barron is really not used to it.
Although these data are not too wrong, if Baron, as an outsider, did not know the investment returns of DS Capital, he would probably think that his financial situation was very dangerous after seeing such reports...
But the fact is, given O2 Telecom's current operating conditions and future plans, I believe that in one or two years, even if it goes public through an IPO, Baron will only need to sell a small portion of his shares to clear most of his debts.
Even without considering other measures, and just operating according to the original time and space, in more than a year, the value of O2 Telecom will be between 15 billion and 20 billion pounds.
Although he didn't care much about this report in The Sun, Barron still agreed with one point, that is, he should find a way to reduce the interest on his debt.
The first is that O2 Telecom issued 1 billion pounds of corporate bonds with an annual interest rate of 3.5%. These funds will be used to repay the debt when it purchased O2 Telecom, that is, to reduce its debt to Barclays Bank and Goldman Sachs Group by 500 million pounds each.
And in the UK, O2 Telecom offered a pre-charge promotion to users.
Users who recharge their tariffs to O2 Telecom in advance will receive great discounts. Users who recharge more than 1,000 pounds at a time can even get a refund of the same amount of their call charges.
Of course, those affected by O2 Telecom's event are other operators including Vodafone and BT. Some media even pointed out that O2 Telecom's event is tantamount to drinking poison to quench thirst. After all, although it can gain huge funds at one time, it is actually prepaying the company's future profits and reducing prices in disguise. I am afraid that once the business is not going well, it will easily collapse.
Barron didn't care at all.
It seems like this statement makes sense, but is it really so?
If users' mobile call needs are always met, then it seems that the higher the charges, the higher the profits of telecom operators.
But this is not the case at all. According to Vodafone's information standards at the time, their monthly package of 15 pounds only includes 20 minutes of free talk time per month. After that, additional charges will be made by the minute. At this time, mobile operators in the UK do not charge one-way charges, that is, both incoming and outgoing calls are counted as part of the 20 minutes of free talk time.
The call charges are also different. Calls between fixed-line and Vodafone users are about 0.5 pounds per minute, while calls with users of other operators are as high as 0.8 pounds per minute!
Higher packages, including the 30-pound package per month, have 200 minutes of free calls; the 99-pound package per month has 1,100 minutes of free calls...
You have to know that at this time, the average monthly income in the UK is less than 2,000 pounds. Such charges, especially two-way charges, are still a bit of a burden for ordinary people.
If you join O2 Telecom's family package, the call fee will be lower than Vodafone's - most importantly, calls between O2 Telecom's family packages are free!
This has attracted many British families to join O2 Telecom's family package, and their home broadband and family members' mobile communications can be included in the package.
Moreover, the call charges between O2 users are extremely low during off-peak hours, and normal charges only resume during busy hours, which is only 0.3 pounds per minute.
If you participate in this pre-charge promotion, it can even be equivalent to its communication costs, which is only 1/3-1/4 of Vodafone's!
This is a great blessing for the British people, whose phone bills are relatively high at this time.
According to the data statistics later developed by O2 Telecom, Baron's point of view is also proved - that is, the reduction in tariffs will greatly stimulate users' enthusiasm for using mobile communications, rather than prepaying O2 Telecom's future turnover.
After O2 Telecom launched this pre-charge campaign, their users' average daily mobile phone talk time increased by more than 100%!
This is normal. The British don't have the habit of saving money. They will double their spending when they see a cheaper option...
Barron was not disappointed.
Through this pre-charge activity, in less than a month, O2 Telecom received more than 1 billion pounds in pre-charge fees...
Don't think this amount is too exaggerated. You should know that at this time, O2 Telecom's mobile communication users are second only to Vodafone in the UK.
At this time, there are more than 50 million mobile phone users in the UK. Among the more than 15 million users of O2 Telecom, if only one tenth of them pre-charged 1,000 pounds, that would be 1.5 billion pounds...
With the £1 billion of pre-paid funds, O2 will carry out large-scale equipment upgrades in the UK and increase the deployment of mobile communication equipment in France and Germany, two new markets for O2, to provide better mobile communication services to users in both countries.
Speaking of O2 Telecom's business in France and Germany, if we say that O2 Telecom has a high user share in the UK, their "price war" can be considered to be slightly "restrained".
In the French and German markets, where O2 Telecom is itself a "newbie", it is not polite at all.
After all, no matter what, in these two markets, O2 Telecom is snatching users from its original "local tyrants" and does not have to worry too much.
Mobile charges in France and Germany are even higher than in the UK...
Take D1, the main operator in Germany, for example. The monthly fee is 14.9 euros, which may not seem as high as the monthly fee in the UK, but you should know that their monthly fee is just the monthly fee, and they don't give away free talk time…
The cost of calling fixed-line phones is 0.59 euros per minute, and calling users on other networks ranges from 0.89 to 0.99 euros per minute.
These costs are higher than in England...
Therefore, after O2 Telecom entered the German market, it immediately launched their signature "Family Package". The monthly rental fee for the entire family package is only 19.99 euros, and members are given a total of 100 minutes of free talk time, and calls between members are free!
And each family package can have up to 4 members!
The average monthly fee for each member is less than 5 euros!
What kind of behavior is this? This is simply charity!