26 March 2007
Broadband supplier Virgin Media could be liable for an investigation being held into its market share after rumours of a Pipex takeover bid hit the headlines this weekend.
Virgin Media is already the largest provider of broadband services in the UK and the takeover of failing provider Pipex would see an additional 570,000 customers joining its databases.
Rival bidders for Pipex's customers, including BT and the Carphone Warehouse, complained that they cannot compete fairly with Virgin because it does not have to open up its cable network to them, but an anonymous industry source told This Is Money that the case would throw up a lot of questions about telephony line ownership.
"In a bid to avoid a referral, Virgin Media would argue that its business provided over cable networks is not part of the same market. If they go down that road, there is a real 'gotcha' for the likes of Carphone and BT because of the open network issue.
"If I want to win a Virgin customer, I have to get a new BT line installed at a cost of £120 before I can put broadband in," the source explained.
Virgin Media's biggest rivals in the quest for bundled telecommunications domination BSkyB are also said to be looking into offering a bid for Pipex.
Market analysts have issued concerns that the wellbeing of its current customers is not being put first and that bidders for the firm are simply trying to beat their rivals.
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