Pipex to pipe down?

The ever-shrinking UK Broadband market could get a whole lot smaller very soon. Pipex, who have been in the ISP business for over a decade are currently looking for a buyer to take over their broadband operations.

This news comes as something as a shock, as in previous years there were all signs that Pipex were in rude health, buying independent broadband ISPs Nildram in 2004 and Homecall in 2006, repaying over £43 million worth of debt accrued by the latter.

Last year Pipex also purchased Bulldog and Toucan for the respective amounts of £12 million and £24 million, and had also announced a joint venture with Intel involving setting up a wireless network across the country similar to that of BT‘s Openzone.

Pipex’s pre-tax earnings were estimated at being £5 million for 2007.

This is a sign that independent ISPs are floundering to keep up with the bigger brands like Virgin, BT and Sky, and other providers of triple and quad play services. The fate of Pipex could be decided by one of these bigger fish, (it was rumoured that BT were keen to buy Pipex last year, but this was denied) or another independent ISP seeking a merge, or its services could be snapped up by a mobile phone provider looking to get in on the multi-platform act, as O2 did last year with Be Broadband.

It is unclear as to why Pipex have decided to appoint bankers to look for a deal; the company has provided no comment on this or the rumour that one of its major shareholders had sold all shares in the company.

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