Tiscali hits the buffers

Interesting developments going on at Tiscali. With shares suspended and talks at an end with Sky, the company is currently worth about €100m. With debts of over €500m they are having big problems keeping their head above water and some reckon there will now be a fire sale on a number of assets.

From my perspective this is no bad thing. For a number of years Tiscali has been bullish in the marketplace and always over promised and under delivered. With their purchase of Bulldog last year when they took on Pipex it was inevitable that they would hit the buffers as that client base does appear to be one very hot potato. It nearly brought Cable & Wireless to its knees (sold for £12m even though it cost C&W closer to £120m), ruined Pipex and now making it’s mark on Tiscali. It may be a coincidence but with Tiscali eager to just gain market share at any cost it was a telling sign that they were prepared to take on the Bulldog client base when buying Pipex.

What does it mean to us? Well it adds to the point I have made before that the consolidation in telecoms market has not been to the benefit of users and that dealing with a large multinational does not provide any level of guarantees or security. At least with a smaller company you have more visibility in how it is performing and in dealing with a business such as Fluidata risk is spread as multiple networks are used to deploy services.

Business already using Tiscali’s platform for DSL and MPLS are already starting to hit the phones to minimise risk and move off the network. If Tiscali don’t move quickly to stabilise their position they could find they don’t have a client base to sell.

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