During this time over 20 transactions of over £5m were completed in the sector, but after pausing for breath, it became the consolidators who were consolidated. Energis was acquired by C&W in August 2005, Thus acquired Your Comms for little more than Your Comms had paid for Eurocall in February 2006, and then in turn was acquired by C&W in October 2008.

At this point many resellers were wondering – where will my exit come from?

Step forward a new breed of consolidators, such as Matthew Riley's Daisy, Alastair Mills' Spiritel and David Pollock's Chess; young and hungry players keen to drive their businesses forward through effective acquisitions, supported by the banks. Chess completed over 20 transactions, Spiritel completed 7 acquisitions, whilst Daisy has trailblazed with over a dozen deals , the largest so far being Spiritel in November 2010. Once again the consolidator had been consolidated.

As Spiritel has become part of Daisy, and Daisy focuses on much larger transactions, there may be a concern that exit opportunities are limited for sub-£10m resellers. However, we are already seeing a new group of consolidators for sub-£10m resellers in 2011; businesses willing to step in where Daisy and Spiritel have departed and backed by private equity.

During 2010 there were numerous deals at all levels funded by private equity, including ECI acquiring XLN, Kelso Place funding the 3 way merger to form MDNX, and YFM backing Bluebell Telecom's acquisition of Call Stream. When private equity moves in, they demand growth, and the surest way of growing in this sector is through acquisition. Expect to see these companies involved in numerous deals this year.

The market is undoubtedly changing with new and not so new technologies finally gaining traction with customers, and we are seeing convergence manifesting itself in a number of flavours whether traditional voice/IP, fixed/mobile, voice/data, unified communications or managed services. The consistent message is that convergence or cross-selling is a key measure of success, and presents a great opportunity to generate significant value in your business.

At Knight we continue to get more calls from prospective buyers than sellers, and 'buy & build' is a common theme. There are a number of new entrants buying into the sector and the cycle of consolidation rolls on.

Convergence Summit North is just the place to talk to a wide range of suppliers and consider the future direction of your business. As sponsors of the educational seminars we look forward to welcoming you and supporting your future. So whatever your outlook for 2011, ensure that you thoroughly appraise all of your options, because they will be numerous.?