Feeds

Pipex plotting carve-up for Tiscali deal

Sale to be announced in weeks

Business security measures using SSL

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. ®

Business security measures using SSL

More from The Register

next story
Brit telcos warn Scots that voting Yes could lead to HEFTY bills
BT and Co: Independence vote likely to mean 'increased costs'
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
New 'Cosmos' browser surfs the net by TXT alone
No data plan? No WiFi? No worries ... except sluggish download speed
ISPs' post-net-neutrality world is built on 'bribes' says Tim Berners-Lee
Father of the worldwide web is extremely peeved over pay-per-packet-type plans
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Google+ GOING, GOING ... ? Newbie Gmailers no longer forced into mandatory ID slurp
Mountain View distances itself from lame 'network thingy'
Vodafone to buy 140 Phones 4u stores from stricken retailer
887 jobs 'preserved' in the process, says administrator PwC
Bonking with Apple has POUNDED mobe operators' wallets
... into submission. Weve squeals, ditches payment plans
Drag queens: Oh, don't be so bitchy, Facebook! Let us use our stage names
Handbags at dawn over free content ad network's ID policy
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.