RHK's research arm is bought by Ovum, and the consultancy business becomes a 'boutique'

June 20, 2005

2 Min Read
RHK: Rest in Pieces

RHK Inc. is no more, but the two parts of its business are continuing on under new monikers.

RHK's research division is being bought by U.K. market research company Ovum Ltd. (see Ovum Acquires RHK Research). Ovum has only bought the research division of RHK, which amounts to a total of 17 staff, 12 of them analysts.

RHK's consultancy business lives on as the 10th Street Advisors, a "Global Telecom Advisory Boutique" according to its Website. And with the word "boutique" in the title, we won't expect anything big. [Ed. note: Will they be selling candles and floral scented soap?]

The good news is that Harry Hamster is on the treadmill there, along with nine others including, alas, John Ryan, the R of RHK.

Fash Darabi, managing director of Ovum Telecoms, declines to say how much Ovum paid, but analysts in this field speculate that it wasn't a lot, possibly somewhere between $1 million and $2 million.

"I don't want to say that RHK has been broken up, but by breaking it up, we're picking up something that is nice and clean and profitable," says Darabi.

The reference to cleanliness refers to the absence of "liabilities and overhead" that Ovum might have been lumbered with had it bought the whole company, Darabi says. The whole company was up for sale, but "we didn't discuss the purchase of the consulting arm."

RHK's research business "was subscale," Darabi adds. [Ed. note: Maybe he meant to say "boutique."] He says it didn't have the sales and marketing muscle to sell its research worldwide. Ovum has about 230 on staff, about 25 of whom have been recruited this year, and its revenues have increased 15 percent in the past year, according to Darabi.

Observers think the acquisition makes a lot of sense for Ovum, because it brings it expertise in new areas and strengthens its presence in North America. The combined company will be known as Ovum-RHK, which sounds like a prescription treatment for migraines.

RHK's history is one that reflects the ebb and flow of the telecom industry itself. The company was founded in 1991, and, by September 2001, it had swollen to more than 130 people -- a growth of 160 percent from its January 2000 headcount of about 50. Shortly thereafter, the company's market projections began to rise while its analyst and management numbers dwindled (see RHK's Fat OSS, RHK: No Numbers for You!, RHK Changes CEOs, and RHK's OSS Loss.

As a nod to RHK's role as one of the most entertaining prognosticators in the field, we'll predict that the two parts of RHK will each grow to become a $900 billion market -- a 4,550 percent increase -- by 2022.

— Peter Heywood, Founding Editor, Light Reading

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