Fresh news over the weekend has speculated that Virgin Media (currently the largest broadband provider in the country) is going to buy out Pipex for about £470m, possibly this week.
If the move goes ahead, Virgin Media will add Pipex’s 570,000 customers to its current 3.3m customers, however this may place Virgin Media in hot water with the competition commission body over its market share.
Rival bidders for Pipex, including BSkyB, BT and Carphone Warehouse, are reportedly reporting the buy out to the Office of Fair Trading. As these companies feel that they cannot compete fairly with Virgin Media because it does not have to open up its cable network to them.
It’s reported that Virgin Media will aim to combat this by claiming that their cable network is not part of the same market. This would be a real blow to the likes of BT and Carphone Warehouse, who are also complaining to Ofcom to allow themselves to use Virgin’s Cable lines. Currently BT need to install a new BT line costing £120 to win a Virgin customer.
The Pipex sale has also thrown into doubt the future of Sardinian based ISP Tiscali, which has around 2 million UK customers. Although Tiscali claim they will not be sold, they do have a large loan to repay and have investment bankers touting the group to other UK firms. Watch this space.
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