BSkyB in talks regarding Tiscali UK asset purchase
Italian outfit Tiscali is in talks with BSkyB about the possible sale of the group's UK broadband operation which has been on the market for some time. After a very public auction it appears as if BSkyB is the only bidder left around the table and Tiscali is desperate to sell as soon as possible. The UK operation has approaching 2 million broadband customers and the asking price is around about the £450 million level although some experts are sceptical about such a high price.
If BSkyB can agree a price it would catapult the company to number three in the UK broadband market behind BT and Virgin Media. This in itself would ratchet up the competition in the sector which has been more and more dominated by the larger players. While we are on the verge of the U.K.'s fibre-optic network there is some concern whether a return on investment could be made in the current economic climate.
There is a feeling that while BSkyB would benefit immediately from the acquisition, via the cross selling opportunities, although the group is looking to position itself for the new age in UK broadband which is not too far away. This is around about the time we could see a number of the smaller operators acquired by larger groups or left to go under. While competition has held prices low for sometime there is a feeling that as costs increase customers will be forced to pay more for their broadband service.
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