Broadband

Carphone Warehouse is reported to still be in talks to buy Tiscali. The Italian-owned ISP had been hoping to set up an auction between Vodafone and Carphone Warehouse this summer but Vodafone pulled out of the process, believing Tiscali had valued itself too highly.

Tiscali is believed to still be talking to Sky about a possible sale and now the Financial Times is reporting that Carphone Warehouse is also interested although none of the parties have commented officially.

Tiscali’s strongest bargaining point would appear to be the boost its subscriber base would offer. If Carphone Warehouse were successful in its bid it would overtake Virgin Media and push itself from third to second place in the UK. If the sale went through the combined group would have just over 4m subscribers, just a couple of hundred thousand subscribers behind BT in top spot.

Conversely, if Sky were successful in its potential bid, it would combine the fourth and fifth players in the market to overtake Carphone Warehouse in third place.

Expanding through acquisition rather than organic customer growth is the most obvious current route for Carphone Warehouse which recently slashed its forecasts for signing new customers during the latter half of this year. The property slump is being blamed for demand for new connections declining as fewer people move home.

Sky is under less pressure to grow through acquisition as it has pointed to its 8m television subscribers as its most fertile new market for broadband subscribers. Only one in ten of its television viewers also have broadband with Sky, leaving the company confident its satellite television base will allow it to double broadband subscribers to 3m by 2010.

Tags: Carphone Warehouse, Sky, TalkTalk, Tiscali