Reuters reveals the news that the Tiscali group has received an unspecified number of bids for the sale of some or all of the Tiscali group.
It is believed that Carphone Warehouse has made an initial bid of £550m for the UK specific parts of Tiscali. The UK arm of Tiscali has an attractive share of the market at some 15% of broadband connections. In the groups home country of Italy they only manage around 5%.
If Carphone Warehouse was to gain the UK business it would overnight become the largest retail broadband provider, and gain a wholesale operation that sells services to a number of other providers. For a provider such as Vodafone, the purchase would allow them to become a major player rather than a provider simply reselling a BT Wholesale managed service. The reasons for BSkyB to buy Tiscali seem less certain. It has been suggested it was to gain access to the Tiscali TV platform, but this could have been acquired for a much smaller price when the original HomeChoice service was up for sale.
Hopefully any sale will take place quickly since if the UK arm is left in limbo for too long, investment in network capacity may stall leading to a worsening service as more customers join the network ,in addition to customers use of broadband expanding to make it a more central form of entertainment in the home.