Tiscali mulls German sale to fund UK 'triple play'

Tiscali, the new owner of pioneering video-on-demand (VOD) service HomeChoice, is considering the sale of its German operations in order to fund its new 'triple play' offering in the UK.

Following the takeover by the Italian internet service provider (ISP) of Video Networks last week, the Milan-based company is believed to be in advanced negotiations to offload its German arm, which is valued at around £34m.

Bidders are reported to include Arcor, Vodafone's German's fixed-line operator, Netherlands telco KPR and United Internet of Germany. BT may also have expressed an interest.

Sources claim that banking services group UBS has been appointed to handle the sale.

According to a report in The Business newspaper, a sale by Tiscali of its business in Germany, which is said to be flagging and only contributed about 9% to group sales during 2006's first quarter, would enable Tiscali chief executive Tommaso Pompei to increase investment in the UK.

Last week, the ISP spent an estimated £60m on Video Networks, founder of HomeChoice, and now plans to offer a 'triple play' service of high-speed internet, fixed-line telephony and television with 95 channels including VOD that enjoy additional investment should the German sale be successful.

Tiscali UK is also believed to be in talks with a number of major mobile networks in the hope of adding mobile telephony to its package in order to provide 'quadruple play'.

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