Telco consolidation talk grows

The consolidation battle in the British telecoms sector has ramped up as reports emerged of a rescue bid by UK-based business ISP Colt Telecom and US-based Global Crossing for Thus.

The consolidation battle in the British telecoms sector has ramped up as reports emerged of a rescue bid by UK-based business ISP Colt Telecom and US-based Global Crossing for Thus.

Three weeks ago, Cable and Wireless made an unsolicited approach for the assets of Thus totalling around £300m.

Had the deal gone through, it would have potentially established Cable and Wireless as the number two player in the UK enterprise space and would also have added a substantial Scottish business to Cable and Wireless' portfolio.

Meanwhile, mobile operator Vodafone is now understood to have walked away from Anglo-Italian broadband firm Tiscali, which it was linked to earlier in the month.

Tiscali remained up for sale and said it was planning to make a firm decision on its future by the beginning of next month.

Matthew Townend, managing director at Illume Consulting said an acquisition would be good news, offering compelling evidence of Tiscali's recovery from its past troubles.

"It went through some tough times, but has fought back and has some strong propositions," he said.

Peter Gradwell, CEO at business internet specialist and Tiscali partner Gradwell.com,also thought a larger owner would bring benefits.

"Tiscali only has about 900 exchanges unbundled; others have more," he said. "There are lots of places where we've found we can't deliver our services because Tiscali doesn't offer the infrastructure. If they get bought by a bigger player we hope that would improve."

But one source who declined to be named said interest from a party of Vodafone's scale could damage the channel.

"My concern for Tiscali is that they are doing some really interesting things on the wholesale, channel side," he said, questioning what would become of Tiscali's channel-facing business.

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