07/09/2006

Pipex buy Bulldog and Tucan

Another 2 broadband providers fall to the consolidation in the telecoms/ISP markets with Tucan and Bulldog being acquired by Pipex who now claim around 570,000 broadband customers.

Tucan's purchase isn't really suprising as margins for consumer broadband are diminishing, more so now with broadband being given away free as part of other offerings.

C&W have also being looking for a way to dispose of their Bulldog retail customers as they have been unable to compete in this business (especially since the launch of Carphone Warehouse's TalkTalk3 package). Pipex also gain the use of the Bulldog name.

It makes a lot of sense for C&W to do this as they can now concentrate on a wholesale offering (which is a turn-around as they stopped offering one when they acquired Bulldog), and gain Pipex as a wholesale customer.

Consumer broadband and local loop unbundling is all about economies of scale. There are several LLU operators all competing for the customers in near enough the same (expected) 1,000 local exchanges that are being unbundled. If a wholesale provider could gain enough market traction the unbundler's could utilise them instead of unbundling themselves. This would potentially allow a greater number of exchanges to be unbundled with a greater number of users per exchange which would mean the economics become much more favourable. Unfortunately this requires companies in a highly competetive market working with each other, which is the stumbling block which rapidly degrades into telco politics.
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