Vodafone 'eyes up Tiscali'

Mobile phone operator Vodafone was today reported to be eyeing the UK operation of Tiscali ahead of an assault on the broadband market.

Mobile phone operator Vodafone was today reported to be eyeing the UK operation of Tiscali ahead of an assault on the broadband market.

Vodafone is putting the finishing touches to a wide-ranging strategic review and the Sunday Telegraph said it was keen on the one million broadband customers of Tiscali in the UK.

Any takeover would be in response to an expected move by rival Orange to offer “free” residential broadband to its mobile customers through its Wanadoo sister company, the paper added.

A spokesman for Vodafone, which reorganised recently and set up a separate unit to focus on innovation including converged services, dismissed the report as “pure speculation”.

It comes as other companies gear up to offer customers a wider range of products that can be bundled together under a single bill.

Cable giant NTL has agreed to pay £962.4m for Virgin Mobile to create the first UK company to promote a “fourplay” offer of pay TV, internet access, fixed line telephony and mobile phone services.

BSkyB acquired telecoms services provider Easynet, while Carphone Warehouse roped cut-price broadband to its fixed-line Talk Talk service earlier this month.

Tiscali, which is listed on the Milan stock market, is investing more than £60m to put its own equipment in exchanges owned by BT.

Known as local loop unbundling, the move gives Tiscali much more control of the speed, price and service standards of the broadband products it is able to offer.

Today’s report also named Bulldog – the beleaguered broadband operator owned by Cable & Wireless – as a potential target of Vodafone. An attraction of Bulldog is that its equipment is in place in local exchanges in most of the UK’s major cities.

Vodafone has shown a willingness to change in past weeks by reorganising itself into three units, including grouping all its major European markets - including the UK and Germany – under a single chief executive.

Its business in Japan was sold to SoftBank for £8.9bn last month and analysts believe a $50bn bid by US-based Verizon for Vodafone’s 45% stake in Verizon Wireless is just around the corner.

An agreed deal for the shareholding would give Vodafone major headroom to return cash to shareholders and boost its share price, which has stagnated over the past three years.

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