Vodafone out of Tiscali race

Source: Exec Digital UK

Date :19/06/2008 10:14:58

Mobile phone group Vodafone has pulled out of the auction for Italy's Tiscali, it is believed.

People close to the auction claim that Tiscali, the Milan-listed internet company that has fixed-line broadband operations in the UK and Italy, had received at least one offer, but that Vodafone would not make a proposal.

Both Vodafone and Tiscali declined to comment.

It is believed BSkyB and Carphone Warehouse, Italy's Wind and Swisscom are all still interested in Tiscali.

However, Vodafone was the only company interested in buying both Tiscali’s UK and Italian broadband operations.

The four remaining interested companies are eyeing either its UK or Italian operations. The UK operations are much bigger and should generate about 70 per cent of Tiscali’s revenue in 2008.

People close to the auction said Vodafone had pulled out because of a disagreement over Tiscali’s valuation. It might rejoin the auction if Tiscali did not reach an agreement with one of the four remaining companies.

Vodafone had been considering making an offer for Tiscali’s broadband operations in

the UK and Italy as part of its expansion beyond mobile into fixed-line internet access.

Fixed-line

The only one of Vodafone’s leading European markets where it does not have fixed-line operations is the UK.

Vodafone regards selling fixed-line broadband to its mobile customers as a way of improving loyalty, as mobile operators in Europe’s mature markets are keen to minimise the costs that stem from customers defecting to rivals.

In January, Tommaso Pompei, then Tiscali’s chief executive, said he expected its operations to be bought by rivals.

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