Carphone Warehouse mulls Tiscali bid, report claims

Carphone Warehouse is mulling a bid for Tiscali's UK broadband user base, according to a report. The Italian group is running for the exit from the low-margin consumer ISP market.

A Times source confirmed CPW is considering swallowing Tiscali's two million-plus customers if they're on the block "at the right price".

The six companies that currently control 95 per cent of the UK ISP market would be cut to five.

A deal for fourth-placed Tiscali would make CPW the UK's largest broadband provider. Its 4.6 million subscribers would mean it would leapfrog BT and Virgin Media in the rankings. It is currently placed third after its last big acquisition of AOL's broadband base, at the tail end of 2006 for £370m.

Blighty accounts for two thirds of Tiscali group revenues. Italian press reports over the weekend said top brass expect to find a buyer for the business by the end of April and on Monday the group said it had hired JP Morgan to broker negotiations.

At this stage of the sale, however, just about everyone in the ISP game is being linked to interest in Tiscali UK. Consumer broadband provision is now simply a numbers game: the more you have, the tighter you can squeeze your costs. ®