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C&W eyes Pipex access network

What a carve-up

The smart choice: opportunity from uncertainty

The remains of Pipex are being picked over by Cable and Wireless as part of a planned outsourcing deal. Engineers and consultants arrived onsite yesterday for talks to take over the running of the access network that connect customers to Pipex's London core network and the internet.

The talks form the next stage of Pipex's plan to dismember itself. Pipex was gradually squeezed out of the broadband market by fierce competition and consolidation.

Its biggest asset - the broadband customer base - was sold to Tiscali in 2007 for £210m. The WiMAX joint venture it owns with Intel is being demerged, meanwhile.

Outsourcing the access network to Cable and Wireless would leave Pipex as a hosting network and business broadband provider, though perhaps not for much longer.

According to the Financial Times yesterday, the City reckons Thus group and former Pipex boss Peter Dubens' private equity firm Oakley Capital are the front-runners to buy the remaining gristle.

A spokeswoman for the firm said it does not plan to make anyone redundant if the Cable and Wireless deal goes through. About 30 people currently maintain the access network from Pipex's Oxford office.

There's no word on the size of any Cable and Wireless offer - discussions are ongoing, as the following email to staff from current chief Mike Read illustrates:

Following the sale of the Broadband and Voice business to Tiscali in September 2007, we have continued to review our core business services and the way we provide them. In recognition of the need continually to work towards more efficient services and processes, we are reviewing a proposal to outsource responsibility for management of the Pipex Access network. This is the network between our customers and the core network in London.

We have entered into discussion with Cable & Wireless regarding the proposal that they take over the planning, provision, maintenance and management of our access network. These discussions are ongoing and no agreement has been reached.

If this proposal is agreed, it will have an impact on around 30 people who currently support our access network - most of these people are in the Oxford office. HR will today contact all staff that could be affected, in order for us to identify and address the questions and concerns that they may have, as well as to communicate relevant information in a timely fashion.

Cable and Wireless was unavailable for comment. ®

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