Tiscali has confirmed that it is currently holding talks with BSkyB over plans to sell its UK business to the broadcasting giant. If successful, the deal, reported in the press over the weekend to be worth approximately £450 million, will see BSkyB acquire a broadband provider which currently has nearly two million customers in Britain.
The broadcaster would then be behind only BT and Virgin Media in the highly competitive broadband market. Broadband giant, Virgin Media, currently has approximately 3.8 million customers.
Tiscali has been up for sale since earlier this year and Carphone Warehouse, a company which was previously in with a great chance of acquiring the broadband provider, is no longer involved in the bidding war. Vodafone and BT have also pulled out of the auction recently.
Vodafone’s decision to step away from the bidding process has come as a particular surprise, since the company once stood as firm favourites. The company’s apparent willingness to acquire both Tiscali’s UK and Italian broadband operations had put them in a very strong position.
If Vodafone had wanted to acquire Tiscali’s Italian operations, they may have had to fight against strong competition from companies including Wind, which is the third largest mobile operator in Italy, and Swisscom, which currently owns Italy’s Fastweb.
A couple of weeks ago, BSkyB announced impressive quarterly results. Its broadband customer numbers have increased to almost two million, with one in five customers of Sky choosing to take up the service. Furthermore, the company’s total customer numbers have exceeded nine million.
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