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Pipex pitches for rejected C&W SMEs

But will Pipex be poacher turned prey?

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Pipex has become the latest telco to woo SMEs dumped by Cable and Wireless (C&W). Four weeks ago C&W announced a major restructuring of its business. As well as announcing up to 3,000 job losses, the firm also revealed plans to axe the number of customers from around 30,000 to just 3,000.

It is these abandoned small businesses (SMEs) that Pipex is trying to coax with the promise of a "credible alternative to BT for SMEs looking to ensure business continuity and security over the long term".

Pipex isn't the first telco to make a pitch for C&W punters. Scottish telco Thus and BT have already signalled that they would be happy to take on any former C&W customers.

But in a dig at BT, Maria Cappella, MD of Pipex Network Services said: "What BT fail to realise, is that many SMEs joined C&W in the first place as an alternative provider that was hopefully more sensitive to their needs. Unfortunately, they've been left high and dry by the latest decision by C&W to terminate their contracts."

She went on: "Although many providers will undoubtedly join BT and Pipex in setting up helplines for troubled SMEs, business owners and managers still need to take the same care in selecting their new supplier as they would if they were making the decision in different circumstances. Ensuring your supplier has competitive call rates, plenty of redundancy in its servers and a tier one broadband network, are just a few of the things they need to consider."

Indeed, Pipex's acquisition of Homecall - the fixed line business from Caudwell Communications - last week is a sign that Pipex is really going places.

Or is it? Analysts at Ovum aren't so sure.

"In a world where most of its rivals are gearing themselves up for triple-play through the inclusion of VoIP and TV-over-DSL, Pipex's DSL/CPS [carrier pre-select] dual-play strategy seems to be a case of too little, too late, to close the gap with its bigger rivals," said Ovum. "Not capable of generating the economies of scale of their larger peers, yet lacking the focus of small niche players, the medium-sized players such as Pipex are stuck in a no-man's land, with grim survival prospects."

And it gets worse. The Business reported at the weekend that speculation is growing that Pipex is being set up for a take-over target. In February, BT was forced to play down speculation that it was eyeing up Pipex even though sources confirmed to El Reg that the giant telco was sniffing around the broadband ISP.

Part of the interest in Pipex stems from the fact that it is only one of two operators (the other is PCCW) to hold a licence to develop WiMAX networks in the UK. BT wants to use WiMAX to help support a mobile service based on the technology, but needs the licence to proceed. ®

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