Vodafone May bid for Tiscali

May 2, 2006 - source: BWCS

The battle for the "quadruple play" market (the ability to offer fast internet, fixed line and mobile telephony and TV services), in the UK looks like heating up with reports that Vodafone is poised to make an offer for the British unit of Italian-based ISP Tiscali.

According to weekend reports in the Sunday Telegraph newspaper, the global mobile giant sees Tiscali as one possible takeover target as it bids to break into the UK broadband market. The Newbury-based mobile outfit is due to announce the results of a strategic review next month.

So far, Vodafone has dismissed the reports as "Pure speculation." However, the Telegraph quotes on official as admitting that the company "knows it will only be able to prosper by offering a suite of products." Should Vodafone stick to its policy of offering purely mobile services it is in danger of being left behind by the newly merged NTL/Virgin Mobile powerhouse and also by its UK mobile rival Orange, which can offer broadband through its sister company Wanadoo.

Earlier this month UK cable group NTL finally succeeded in wresting control of Virgin Mobile from its shareholders. In the end NTL agreed to pay a total of £962.4 million to take over Richard Branson's slick MVNO operation. The deal won the backing of the Virgin Mobile Group after Branson reportedly offered to take less than other investors. Earlier takeover attempts had been rebuffed by the group.

The combined company will apparently be branded under the Virgin name in order to play on the mobile company's superior reputation for customer service. NTL has agreed an exclusive 30-year licence for the Virgin brand, and will pay Virgin a sum of around £8 million a year to continue using the name.