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Tiscali UK to invest £61m in LLU

First exchanges due this summer

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Tiscali is to plough €90m (£61m) into unbundled broadband services in the UK over the next three years as part of a renewed effort to secure a sizeable share of this ever-growing sector. The Italian-based ISP plans to cherry-pick the most lucrative exchanges in the UK to develop its "selective unbundled network".

Tiscali UK is currently installing its kit directly into 27 BT exchanges as part of its first phase of local loop unbundling (LLU). These exchanges, which service densely populated towns and cities, should be ready to provide unbundled broadband services direct to punters bypassing BT's network by the end of May.

In a statement today Tiscali said: "The UK is an extremely attractive market, offering substantial growth opportunities which Tiscali plans to seize through significant investments, spending around €90 million over the next three years, on developing its selective unbundled network."

While this means that Tiscali UK should be able to offer competitive broadband services similar to the ones announced by another LLU ISP - UK Online - which unveiled an entry-level service for under £10 a month. The downside for punters, though, is the limited availability of these services.

Overall, Tiscali said it plans to invest more than €300 million in its core country operations - Italy, UK, The Netherlands, and Germany - principally on developing and completing unbundled network infrastructure.

The investment forms part of Tiscali's business plan until 2007 which "accelerates growth in the four key countries - Italy, United Kingdom, Netherlands and Germany."

Having flogged a string of non-core businesses and most recently its French operation to Telecom Italia for €266m, Tiscali has now got enough cash to pay off a loan due this summer and invest further in its business.

Said the ISP in a statement: "The disposal of non core assets, the capital increase in December 2004 and the sale of the French subsidiary Liberty Surf Group gives Tiscali the necessary resources to redeem the bonds due in July 2005 and to finance the projected growth and investments in 2005." ®

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