Feeds

Pipex plotting carve-up for Tiscali deal

Sale to be announced in weeks

Boost IT visibility and business value

Exclusive The breakup of Pipex and sale of its residential broadband customer base to Tiscali is looking increasingly certain.

Insiders at the takeover target say the terms of the deal will be announced in four to eight weeks.

In the meantime, managers are working out the personnel carve-up, with employees destinations in the split already decided.

Tiscali's poor reputation for customer service, worsened by its response to a recent extended email outage, is said to have set some Pipex staff against the sale.

The Register also understands that Pipex's WiMax licence, which complicated speculations over the UBS-brokered auction of the firm, will remain with the rest of Pipex, concentrated on business customers.

As part of the deal, Tiscali will provide the refocused ISP with access to its unbundled network, which is one of the most extensive in the UK and should lower its costs in providing broadband. Tiscali has unbundled more than 400 exchanges, compared to Pipex's 100.

Pipex has about 570,000 customers across its broadband brands, which include Toucan and Bulldog. Each of the big players in the dog-eat-dog communications market - Virgin Media, BT, Sky, Carphone Warehouse - have been linked with a bid for the firm, but have all fallen by the wayside amid rumours of an over-ambitious valuation and concerns over its diverse interests.

Italy-based Tiscali, which has almost 1.5 million subscribers in the UK, stepped into the spotlight in the middle of May when it confirmed it was in early discussions with Pipex.

Back then, Goldman Sachs analysts valued Pipex's telecoms business at £211m and the hosting and network services at £178m.

As middleweights lacking profile and resources compared to the bundling frontrunners, Tiscali and Pipex have similar problems in attracting residential customers.

Jonathan Coham, a broadband analyst at Ovum said: "This is an interesting move, but Tiscali needs more than just subscribers to maintain its position. They've typically been a low-spending broadband provider, with limited additional services...they'll need to follow this up."

Tiscali and Pipex refused to comment on this story. ®

Boost IT visibility and business value

More from The Register

next story
Scotland's BIG question: Will independence cost me my broadband?
They can take our lives, but they'll never take our SPECTRUM
Trying to sell your house? It'd better have KILLER mobile coverage
More NB than transport links to next-gen buyers - study
iWallet: No BONKING PLEASE, we're Apple
BLE-ding iPhones, not NFC bonkers, will drive trend - marketeers
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
Speak your brains on SIGNAL-FREE mobile comms firm here
Is goTenna tech a goer? Time to grill CEO, CTO
NBN Co adds apartments to FTTP rollout
Commercial trial locations to go live in September
Samsung Z Tizen OS mobe is post-phoned – this time for good?
Russian launch for Sammy's non-droid knocked back
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.