Carphone Warehouse Buys Tiscali’s UK Business

Tiscali has finally found a buyer for its UK broadband business — but for a much lower price than it wanted.

Tiscali, one of Europe’s largest broadband providers, has been looking to sell its UK business for around a year now to rid itself of debts. Now it’s finally found a buyer in the shape of Carphone Warehouse, but for $360 million, which is less than half the amount the company had originally been looking to raise.

The acquisition will make Carphone Warehouse the UK’s largest broadband supplier, giving it 4.25 million users, more than either BT or Virgin, and all the more remarkable because it didn’t enter the broadband market until 2004.

"It feels like an extraordinary achievement, having not been in the residential broadband market for many years," said chief executive Charles Dunstone.

Tiscali is the UK’s fifth-largest broadband provider. Dunstone expects to achieve savings of $75 million a year by 2011 by transferring Tiscali customers to Carphone’s high-speed network and billing platform.

Rather than using existing BT equipment in local exchanges, Carphone Warehouse has installed its own and ‘unbundling’ its customers. Presently 78% of its customers receive a connection over its own network in this manner.

Subject to EU approval, the deal will be concluded on June 30.