Pipex broadband deal collapse

April 17, 2007 by  

The sale of the broadband provider Pipex is likely to collapse. Carphone Warehouse (who owns Talktalk broadband and AOL broadband) has quit the auction for Pipex, the £350 million internet services provider.

Remaining bidders for the broadband company are understood to include Tiscali the rival Italian-based broadband operator. BSkyB, Orange, BT and Virgin Media had pulled out early in the auction process.

However, with the share price of Pipex broadband internet group falling – since Carphonewarehouse announced it was going to pull out of the bidding for Pipex – other UK broadband providers may re-enter the auction; if the price of Pipex drops enough there is a market-share bargain to be had

Fierce competition in the UK broadband market and consolidation with the sector is likely to be the main reason Pipex is seeking an early exit from the market-place. If Pipex opts to continue as an independent player it will need to spend lots on advertising and keep lowering its broadband prices to remain competitive with the other broadband companies that can afford to subsidise their broadband offering from other parts of the their business.

Pipex broadband up for sale

March 21, 2007 by  

Well the number of UK households connected to the internet appears to be growing month on month. According to the latest stats from the government office of statistics, broadband usage is now up to 57% ( National Office of Statistics & lies – latest internet access figures).

And yet oddly while the number of UK households subscribing to broadband seems to be up, then number of companies supplying broadband seems to be shrinking. UK Broadband provider Pipex is now up for sale and the bidding war is intense.

It seems that the latest company having a look at Pipex to buy is Virgin media
. Virgin media as a new business is only 2-3 months old following the merger of NTL and Telewest into the Virgin brand. Both had shocking customer service so the marketing bods thought that under the Virgin banner they could convince their existing broadband customers to stick with Virgin while they sort through the problems of NTL and Telewest broadband.

It would intially seem odd that Virgin media would be looking to buy Pipex broadband before it has got its own house in order but there is a BIGGER picture. Only Virgin media and SKY can truly dominate in the new market paradigm of product bundling (broadband, telephone, and TV) and therefore will be looking to buy up the whole of the UK broadband market place. BT and the CarphoneWhareHouse could get a look in (they are both big after-all) but Virgin and Sky are the one’s to keep an eye on long-term.

We’ll keep track on the who’s going to get to buy Pipex. It might take a few weeks.

Amazing Pipex is up for sale really considering they themselves have been on the acquisition war-path over the last 18 months, buying up all the little broadband providers. It seems that only large broadband providers will survive in the long-run.