UNITED UTILITIES may be forced to accept a lower price than it originally hoped for for its telecommunications arm, Your Communications. City analysts say the unit, which it is believed the Warrington-based company had wanted to sell for around £200m, is now worth around £138m. They add that cut-throat competition in the telecoms sector meant that a quick sale had now become more difficult and the process could drag on into next year. United has been keen to dispose of Your Communications for some time as it seeks to focus on its core activities. "We want to stay close to the things we understand," United chief executive John Roberts told the Daily Post earlier this year. The group has ruled out a stock market flotation for YC, which provides telecoms services to the public sector and corporate customers in the Midlands and the North of England, and has instructed Ernst & Young to oversee a possible sale. However, in recent months, the telecoms sector has been plagued by over-capacity and falling prices as a plethora of operators aggressively compete for customers. Merrill Lynch analyst Robert Miller-Bakewell, who valued the business yesterday at around £138m, said: "Being an alternative carrier in today's UK telecoms market is a form of increasingly acute water torture. "How United Utilities must regret its last-minute rejection of the opportunity to merge the business with Kingston Communications three years ago." Instead, United acquired another telecoms firm, Eurocall, in a £42m deal in an attempt to enlarge YC's customer base of small and medium-sized companies. Citigroup analyst Peter Bisztyga said United should try to offload the business as soon as possible. He added: "I think it is better for them to get out sooner rather than later and not hang around for things to get better." A spokeswoman for United Utilities said yesterday there was no urgency to dispose of YC. "We will not consider an exit until we can be sure of maximising shareholder value," she added.. "Until then, we will continue to focus on growing the business." tonymcdonough@dailypost.co.uk | 
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