Tiscali in trouble, customers face uncertainty

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Tiscali, the ISP, had its shares suspended on the Italian stock exchange yesterday after warning it will not be able to meet interest payments, according to the Telegraph.

Over recent years the ISP has acquired several established ISPs in the UK. Tiscali then proceeded to reduce the quality of both the broadband and customer service that the customers of those ISPs, such as Pipex and Nildram, received. Both Pipex and Nildram previously had reputations as high quality or niche providers.

Tiscali had sought to sell its UK arm to another ISP and had been in talks with Sky but apparently was seeking more than Sky was willing to offer. The Telegraph puts Tiscali’s desired price at £500m whilst The Register puts the price at £600m for Tiscali’s 1.7 million UK subscribers. The Telegraph states that Sky was only prepared to pay £250m whilst The Register reckons Sky would pay no more than £450m. In today’s market with low margins on broadband connections, such prices are just plain silly if based solely on the customer list and not on Tiscali’s UK infrastructure.

Just last night on the first show in the new series of the Gadget Show on Channel Five, Tiscali’s telephone, TV and internet package was recommended as the best buy. Clearly the Gadget Show was only thinking about price and not quality of service. Whilst the Gadget Show may encourage new sign-ups to Tiscali, the recent news about the company may drive customers to request a MAC code and migrate away to another ISP before their broadband is cut off.

The Telegraph speculates that Sky may be waiting for Tiscali to enter administration before offering to buy the customer base at a discounted price. Such a move may be the only sensible course of action. Sky is attempting to maximise its market share, but not at any price.

If you are currently a subscriber to Tiscali but are looking for reliable broadband with excellent support, please call us on 0800 0199 340.

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