Pipex and Intel resurrect WiMax 4 businesses

Pipex may have sold off their broadband and phone services to Tiscali, but their days as an ISP aren’t over yet.

Pipex, in conjunction with Intel are preparing to roll out a sexy new wireless SDSL broadband service to businesses under the new name of Freedom4.

There will be separate packages for home workers (JustData, 1Mbps download and upload speeds) and business users (DataMax, 4Mbps download and upload speeds). There is also a Wi-Fi service for executive types who require mobile net access.

The main advantage of the WiMax platform is that the connection is totally wireless; meaning no additional fees for line rental, potentially saving businesses plenty of coin. However, there’s no mention if voice calls can be transmitted over the same network and we’re pretty sure businesses will want phone lines for this purpose, so this could well be a moot point if it turns out that firms cannot completely avoid paying the dreaded line rental.

Currently, the WiMax network covers businesses in and around Manchester, Milton Keynes and Warwick, with planned rollout set to go ahead – trials suggested that there was “significant demand” for business WiMax

PlusNet push first month free to ex-Pipex punters

In response to Tiscali‘s snapping up of Pipex, PlusNet have launched a special offer to all ex-Pipex customers who feel daunted by the prospect of the takeover.

Former customers of Pipex, and all of the smaller ISPs which that company itself had absorbed, will be able to migrate to any of the PlusNet packages and enjoy the first month for nothing.

“Tiscali acquiring Pipex will create massive customer churn in the consumer broadband market,” said Neil Armstrong, PlusNet big cheese. “Pipex is ranked fifth for customer service by uSwitch and Tiscali ranked seventh. We expect Pipex customers will react to this move by voting with their feet. Broadband users want speed, reliability and first class customer service, not mass market offerings.”

Customers who also shift their home phone services to PlusNet will receive both services for free in the first month, as well as being able to enjoy PlusNet’s existing 90 day guarantee.

Tiscali annexes Pipex

Tiscali are all set to seal the deal with Pipex today, with Tiscali paying out £210 million for the broadband and phone areas of the business, which will net the triple-play provider 570,000 ADSL customers, making its current 3rd place position a little more comfortable.

Tiscali, who have recently signed a deal with Sky which will see a range of channels including those conspicuously absent from Virgin Media’s TV platform, available to Tiscali customers who are able to receive Tiscali TV – an IPTV platform similar to BT Vision.

The ability to offer a TV option to a number of new customers puts Tiscali in direct competition with the big players – time will tell if it can retain this position throughout the year and grow to become a dominant force in the market.

Pipex has been looking for a buyer since March, after years of spending millions on acquiring other small ISPs and wiping out debt, Pipex, one of the first outfits to supply internet services to businesses, has become an acquisition itself.

Big fish eat the little ones – BT acquire Brightview

BT has stumped up £15.8m in cash for UK-based Brightview, the ISP group behind internet access from Waitrose, Global, and Madasafish.

The Brightview ISPs had a total of around 62,000 broadband customers, which will now be able to make use of BT’s exclusive products and services such as the Goth Hub, BT Vision and BT Fusion.

BT Retail chief executive Ian Livingstone said: “This acquisition will ensure that Brightview’s customers can benefit from our market-leading services, resources, and technology development as well as the excellent customer service they’re already receiving.”

Last year, BT swallowed tier-2 ISP PlusNet for a cool £67m, and has further cemented its position at the top of the heap with this comparatively wafer-thin after dinner mint. BT was also rumoured to be interested in Pipex earlier this year, but these rumours fizzled out; Tiscali are instead mooted to take over the Hoff-affiliated ISP.

Tiscali add missing Sky channels to TV platform

Tiscali have turned up the heat on Virgin Media by sealing a deal with Sky which will see the very same channels, broadcast rights of which are at the core of the current Virgin/Sky courtroom debate, to be made available to Tiscali broadband subscribers who can receive their IPTV service, Tiscali TV.

Tiscali recently snuck into third place in the UK Broadband league table, behind Virgin and BT, and is likely to announce details of taking over Pipex soon – if the deal Sky has the desired affect, Tiscali could overtake Virgin by the end of the year and begin to compete directly with broadband and phone market leader BT in the same three markets – broadband, phone and IPTV.

BT is believed to be adding around 2,000 BT Vision customers a week, although exact figures are hard to come by, due to Ofcom not counting BT Vision as a full IPTV service, as the majority of its content is delivered via the Freeview platform. It is estimated that around 1.7 million customers have signed up for Tiscali TV.

Virgin have experienced significant customer migration over the whole Sky debacle – losing 47,000 customers in the last three months – but broadband was one area where Sky couldn’t touch Virgin, until now. Despite Sky unbundling in exchanges faster than anyone else, they currently cannot service as many punters with broadband as Virgin can, so Sky have done the smart thing by empowering the ISP which most directly threatens Virgin’s position.

Sky will do everything they can to make life difficult for Virgin as the Government has commissioned an enquiry into Sky’s acquisition of a stake in ITV, and more recently, Ofcom have, at least momentarily, scuppered Sky’s plans to launch pay-per-view channels on Freeview – both of these inquiries were instigated at the behest of Virgin.

Silver lining in AOL’s LLU raincloud

AOL have reduced the additional price for their non-LLU Silver customers by £5, meaning that the total price for non-LLU customers is now a more manageable £19.99 a month. Previously, customers subscribing to the unlimited 2Mbps Silver service had to cough up an additional £10 a month on top of the basic £14.99 fee if they lived in an area where AOL had not unbundled their gear in the local exchange.

Now that the price has dropped by a fiver, the total monthly damage to non-LLU folk has now lessened. We would like to see the same ethos applied to the Platinum package and hope that other providers follow AOL’s example and reduce the charges made out to customers outside their immediate network; Tiscali, Sky, Virgin Media, take note.

Even better, take a leaf out of Orange and Pipex‘s books which have earned praise for NOT introducing a two-tier pricing system.

Vodafone purchase foreshades future Broadband war

Back in May, Vodafone secured the purchase of Spanish ISP Ya.com, which means that the UK-based mobile network operator could very well push quad play services on the continent by the end of the year.

Whilst this doesn’t directly affect the average UK Broadband consumer, it could conceivably change the current shape of the converged communications market. The parent companies of Orange and O2, both market leaders in the mobile/Broadband stakes over here compete with Vodafone in Europe; the acquisition of Ya.com also puts Vodafone at loggerheads with Tiscali, who have a strong presence in Italy.

In an article that was posted on influential IT website The Register by one Faultline, it was suggested that this move could put Vodafone in strong position for the future:

“If Vodafone decides it cannot bring a full quadruple play to market on lines which are merely leased from British Telecom […] it has the obvious next step of trying to acquire the remaining business of Tiscali, based mostly in Italy and the UK. Tiscali has recently sold off its German and Netherlands operations to focus on the UK and Italy…”

Faultline also states that: “if anyone came in to bid for it, its value would likely rise well above $2bn, making it expensive even for Vodafone,” so whilst it does not explicitly state that a Tiscali takeover is on the cards in the near future, the article reflects how market movements elsewhere can affect things at home.

A Vodafone takeover of, or merger with Tiscali would see another quad play provider entering the UK market, threatening the current top 2 – Vodafone has strong brand power and is the largest mobile operator in the world, something which Virgin Media should be very afraid of.

We put together a quick ‘who owns who’ of our listed providers, to see how purchases and acquisitions overseas could potentially shake things up in the rapidly narrowing broadband market.

BT – owns the majority of the phone lines in the UK, and sells local loops to other services providers as per the terms of the Openreach plan. Also funds, but does not operate PlusNet.

Carphone Warehouse – the largest independent mobile retailer in Europe, which owns and runs a mobile repair service, the newly launched Geek Squad mobile tech support service, and TalkTalk as well as the AOL internet services for the UK, which Sky were also interested in snapping up.

Telefónica O2 – part of the BT Group back in the BT Cellnet days, O2 was bought by Spanish telco Telefónica, which competes with France Télécom/Orange and Vodafone on the continent. More recently, O2 purchased Be Broadband in the UK.

Tiscali – Italian-based ISP which took over the Homechoice IPTV service in 2006, making it a triple play provider of digital TV, Broadband and home phone services. It is highly likely that Tiscali will acquire Pipex by the end of the year.

France Télécom / Orange – the main telco in France owns and runs the Orange mobile phone and broadband services, originally known as Wanadoo. Bundled Mobile/Broadband/Home Phone services were launched following the Wanadoo rebrand.

Kingston Communications – a telco formed from the Hull Corporation which set up its own telephone infrastructure independent of BT around Kingston upon Hull – the phone network is the only municipally owned network in the UK. Kingston Communications owns and runs Eclipse Internet.

British Sky Broadcasting – runs the most popular pay-TV platform in the UK, and launched a converged TV/Phone/Broadband package after the purchase of ISP Easynet in 2005. Sky also owns, but does not operate UK Online, which was part of Easynet during the acquisition.

Virgin Media – compromised of the combined services of the merged NTL: Telewest (cable TV and landline phone service) Virgin.net (broadband), and Virgin Mobile (mobile phones).

Pipex – absorbed the ISPs Host Europe and Nildram in 2004 and both Toucan and Bulldog Broadband in 2006, cancelling out millions of pounds worth of debt in the process in 2006 before launching the infamous David “King of the Internet” Hassellhoff ad campaign. Began looking for a buyer early this year; Tiscali are hotly tipped to take over.

NamesCo – web hosting company which took over Simply.com in 2004; NamesCo supplies domain names, hosting as well as broadband services, and own gold mining facilities in Vietnam, which makes them sound like a front for a James Bond supervillain corporation.

Tiscali takeover of Pipex in the pipeline

The purchase of Pipex‘s residential broadband service by Tiscali is looking even more certain, after individuals at Pipex have indicated that a takeover is on the cards, and that an announcement will probably be made by the end of next month.

The deal is thought only to include the selling of Pipex’s broadband and home phone services – the firm is expected to retain its WiMax network – which would add over half a million broadband customers to Tiscali, which already has around 1.5 million customers of its own.

Tiscali are currently the third biggest broadband provider in the UK, behind Virgin Media (3.4 million) and BT (3.6 million), and will be competing directly with both of these broadband heavyweights in the converged market once its digital TV service becomes more widely available.

Tiscali recently put the wind up Virgin when rumours of a TV deal with Sky was leaked around the same time as the Trade Secretary referred the satellite giant for further scrutiny. It has been suggested that this talk was designed to make Virgin’s courtroom argument look shaky. War makes for strange bedfellows, and Tiscali, who unlike BT, Virgin or Sky, have no infrastructure of their own (phone lines, cable, satellite) and are unable to bundle as many additional services to as many customers.

Tiscali’s reputation has also taken a hit over a technical gaffe which saw customers unable to send messages from Tiscali’s email service, which ultimately cheapens the offer of free email addresses – when Tiscali need to be bringing in new customers now more than ever before, mistakes like this will do little to endear them to the broadband-buying public.

Talk of Tiscali deal with Sky hits Virgin where it hurts

It looks at though the next couple of months are going to be a pretty bad for Virgin Media. In a surprise move, it has emerged that a deal with Sky could see Tiscali’s TV platform playing host to a number of Sky channels, including the channels, Sky One, Sky News, Sky Sports News etc, which were dropped from Virgin earlier this year.

It is believed that Tiscali are preparing to accept terms and rates above those which were offered to Virgin before the court negotiations took place, which will strengthen Sky’s courtside position, and makes Virgin look bad by comparison. The timing of this announcement is impeccable – just days before Alastair Darling is set to rule whether Sky should be hauled over the coals over allegations of anti-competitive behaviour.

Tiscali are crucially positioned behind Virgin in the Broadband stakes – acquisition of the contentious Sky channels, something which saw a large number of customers leaving Virgin over, could see Tiscali’s consumer base swell dramatically.

Tiscali are also rumoured to be up for buying Pipex, and if they go through with the purchase, then the size of the Tiscali customer base could well overtake that of Virgin Media by the end of the year, and would bring Tiscali into direct competition with UK Broadband leaders BT, who are also trying to push their IPTV package alongside internet and phone services.

This news couldn’t come at a worse time for Virgin Media. The recent announcement of bandwidth throttling, where Virgin reduce the connection speeds of users during peak times in order to provide a more balanced service, has disgruntled some customers, especially those who pay a premium for the faster service speeds.

Bandwidth shaping has had to take place due to the technological nature of a cable internet connection. Unlike ADSL, where the quality and speed of your connection depends on the distance of your house from the exchange, the performance of a cable connection largely depends on the browsing habits of other cable users in your area. As most people tend to use the internet at home at peak times – when they get back from school or work and at weekends – performance over a local cable network can slow down considerably.

Virgin’s recent ADSL deal with Cable & Wireless could sort this problem out in the long term, as customers may benefit from a standard phoneline connection if they live close to an exchange. Virgin intend to release new features for the digital TV set-top box, which they have been giving to customers singing up for their 8MB ADSL service, promising to offer “advanced TV services in all areas throughout 2008″ as take up increases.

However, with BT Vision very much alive and kicking, Freeview leading the way in the world of digital TV, and with the switchover due to start early next year, 2008 may be a bit too late. Virgin are going to have to seriously beef up their ADSL packages if they want to attract customers who might see themselves getting a better bundle deal with another provider.

Virgin extend UK ADSL network

Virgin Media have just inked a deal with Cable & Wireless – former owners of the Bulldog ISP, before it got snaffled by Pipex – which will allow the multimedia giant to roll out its quad play services to over 80% of UK homes via an unbundled ADSL network. This is a significant increase of the former percentage of homes covered by its non-cable broadband network, which hovered somewhere around the 50% mark.

Now, Virgin can market their digital TV set-top box, putting the group on a similar pegging to main TV competitor Sky in terms of the number of customers it can potentially supply with services, however Virgin now have the edge over Sky in terms of Broadband – whilst Sky’s satellite footprint covers nearly all of the UK, the same can’t be said of it’s Broadband network, for the time being at least. Sky have unbundled equipment in over 1,000 phone exchanges since March last year, and show no signs of slowing down.

Recently, Sky have published personal exchanges between boss James Murdoch and his opposite number at Virgin, Steve Burch, in an attempt to embarrass Virgin by claiming that they rejected Sky proposals to resolve the carriage fees dispute. Next week, trade secretary Alastair Darling is set to announce whether to submit Sky’s controversial swoop purchase of a stake ITV should be submitted to the Competition Commission, which could potentially leave ITV open for a Virgin bid.