08/05/2009

Carphone Warehouse to acquire Tiscali UK

Carphone Warehouse (CPW) are acquiring the assets of Tiscali UK for £236m from Tiscali (Italy).

Tiscali have been up for sale for some time as broadband economics worsen and competition increases. Both BSkyB and CPW have been rumoured to be in the running as well as outsiders like BT.

It seems CPW have got to the finishing post and they'll gain Tiscali's infrastructure and customers. CPW's customer base will increase to 4.25m making them the largest UK (home) broadband provider. There's going to be considerable overlap in infrastructure and staff so CPW will likely make sweeping cuts in both. Tiscali's IPTV platform (previously HomeChoice) will give CPW an edge to compete with BT Vision and whatever Sky are planning. Tiscali only managed to achieve 100,000 IPTV customers (they wanted double that) and maybe CPW will be able to get that out to all their customers.

If CPW can utilise the extra infrastructure and minimise costs then they may be one of the larger players that survives the broadband commoditisation game.
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