Under the terms of the deal, the owner of Homechoice, namely Video Networks International, is to sell 100% of the business in exchange for a 11.5% stake in Tiscali UK. The deal allows for the stake to rise to 20% if certain profits targets are met, and allows Tiscali to offers its UK client base a triple play service (broadband, telephone and pay TV) by the end of the year.
The Cagliari, Italy-based ISP added 360,000 customers in the first six months of 2006, bringing its total broadband customers to 2.07 million, up 21% from the end of last year. The crowd jewel in Tiscali’s operations is the UK, which contributes an estimated 44% of the ISP’s sales. Its UK installed base is currently sitting at 1.2 million customers.
This gives it am estimated 10% market share, behind the likes of BT Group Plc, NTL Inc, and AOL UK.
Homechoice has recently been on shaky ground, after it warned that it could run out of funding after Larson refused to invest any more money. However, while it was one of the first UK providers to offer TV over IP, its modest 45,000 customer base is limited to London and Stevenage.
Tiscali was once regarded as a serious challenger to Telecom Italia, but it has had a difficult couple of years after a series of mistakes including an over-ambitious international expansion policy left it struggling to repay maturing bonds.
