Quotes in the UK’s Financial Times this week from the CEO of Tiscali, Tommaso Pompei, echo what we have been saying about the company for a long time ‘ it is a magnet for takeover talk, given that ISP lines are going for higher and higher amounts in each successive deal across Europe, particularly as the major cellular operators around Europe ‘ notably Orange, Vodafone and Telefonica ‘ all look to quadruple play services, which means having access to fixed lines.
Pompei was cited as saying that his company was not for sale, but that he acknowledged that since he saw little opportunity to buy rivals, they may indeed end up buying Tiscali. The logic is indeed compelling and we are sure that he meant to highlight his understanding of the situation, because he knows that everyone in Europe in financial circles reads the Financial Times, and he continuously would like to have increasingly large offers made for the company.
Tiscali has sold off most of its ISP operations around Europe. It has left strongholds in Italy and the UK, and in both territories it has an advanced IPTV strategy, moving to a full triple play. In the UK it bought the legendary Homechoice service, one of the best content collections on any IPTV service in Europe, paying $190 million for it in August 2006, the same month when it sold its Germany operations for $65 million, and a month later its Netherlands operations for $323 million. We think it still owns a small operation in the Czech Republic.
The fact that a rumor about the UK holdings being up for sale has been cited in the UK national newspapers on at least 6 occasions, may simply mean that they are obsessed with the ISP being for sale, however deals for Tele2 subsidiaries (sold to Vodafone), the T-Online French ISP service and two AOL subsidiaries have all shown the rising price tag for the limited number of independent ISP holdings around Europe, and eventually Tiscali must become embarrassed by the emergence of Quad plays around it, and it either has to begin an MVNO and offer a four way service itself across Europe in order to compete, or it must sell up.