Sky in the broadband world is best known for its cheap broadband deals for Sky TV subscribers, but it seems BSkyB is looking to expand with reports of a £450 million bid for Tiscali.
The Sunday Times has more detail on the bid. The whole process is at an early stage currently with the due diligence phase still to complete. If Tiscali allows this potential bid to fall by the wayside like the last Vodafone one there is then a question of what other bidders are likely to make an offer that would be better in terms of the money offered.
If Sky were to acquire the Tiscali userbase, which comprises of customers from Pipex, Nildram, Freedom2Surf Bulldog and HomeChoice as well as those directly with Tiscali, there would be around 3.6 million customers, making Sky the third largest broadband provider in the UK.
There has been talk of Sky entering the video on demand over the Internet arena, with Tiscali already running a Tiscali TV product it may well be something Sky is interested in acquiring. Alternatively if Sky acquires this video over broadband operation it can ensure a competitor does not acquire it, and avoid increased competition.