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Tiscali leaving Germany: rumour

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Internet provider Tiscali is considering leaving the German market to concentrate on its Italian and British operations.

According to Italian news agency Ansa, quoting inside sources, the Italian parent group has already commissioned a bank to sell its German division.

Tiscali won't comment on the rumours.

Although the German arm of Tiscali managed sales of just under €20m, it posted a loss of €2.8m in Q1 of 2006. Last year, Tiscali was still considering whether or not to make its own DSL network in Germany.

Italian-literate Reg readers can read more here.

Tiscali hasn't done particularly well in Europe, with the exception of Italy and the UK. The German market in particular is difficult for Tiscali, although it is not the only ISP suffering.

Time Warner recently hired Citigroup to explore the sale or restructuring of its entire AOL Europe unit, including AOL Germany.

Merrill Lynch yesterday downgraded Tiscali to "sell" from "neutral" after Tiscali announced a deal with Video Networks International in the UK.

The bank thinks the UK is a competitive market "with a raft of high profile new entrants on the broadband market" and Tiscali would profit more from asset sales. ®

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