BSkyB to raise $600m bond to pay for Tiscali

That's about £240 per customer. To be honest it would be cheaper to run a decent TV marketing campaign and a special offer "First 3 months free to Tiscali customers". I wonder how much Tiscali's TV campaign cost them. Surely the Sky broadcast network could be employed.

I suspect BSkyB won;t be to bad a home for the poor users, but buying another companies unhappy customer base is a quick fix; and quick fixes always come back to bite you, as Tiscali has already found out.

The reality of consumer broadband; Only BT can win

Excellent week for consumer broadband again; Talktalk breaking apart, BSkyB to rescue Tiscali, and Virgin Media losing 15% of it's staff.

We don;t normally talk about Consumer Broadband; primarily because we believe that unless you own the network you will eventually go bust. But the last few days have gone so far to prove our theory, that we just had to cover the latest developments.

Back in 2006 the launch of a free Broadband service from everyone's favorite mobile phone store was hailed as the way forward. Despite losing Carphone warehouse £45m($70m) in the first 6 months, industry analysts claimed it was the future, and Ofcom said this was proof that they were taking a tough regulatory line: "Look at these 700 shiny, independent ISPs, we're doing a fine job". The elephant in the room was of course that virtually all of them relied on BTs infrastructure.

Since then a good number of these Standalone ISPs have failed; the prefered term I believe is "were acquired by Tiscali", and loads of little providers have been lost, failed to flourish, or just given up .

In the same period NTL was sold to Virgin Media for 4 pence, just before it went upside down, EasyNet was hoovered up by BSkyB. Now the same analysts who said Free Broadband was the future are urging Carphone Warehouse to split out (dump) Talktalk in the delusional hope that someone like Vodaphone might pay £1bn for its customer list, Virgin are cutting staff, and it looks like Tiscali is going to vanish.

BSkyB and NTL are only short term winners; yes they own network, but not enough to cover the country, they too rely on BT to reach their "off-network " customers and in the current economic climate there is no chance of finding the money needed to expand the networks; even these groups TV assets cannot be relied on to fund network coverage as people switch to freeview (you can get the BBC and Dave; what more do you need?!).

So it comes to this: Accelerated by the recession, the dream of a diverse, vibrant, multiplaying broadband led consumer teletopia has come down to three big players, none of which can deliver the whole convergence dream and eventually there will just be BT; just like back in the last big recession.

BT to shed 10,000 jobs

Less than 24 hrs after Virgin Media announced they would be shedding a 2000+ jobs. BT have announced further 10,000 job cuts with contractors out the door first.

I say further because anyone who follows BT will be aware that they have already reduced their global workforce by 1/3rd, down from nearly 250,000 in 2006. In October 2007 a representative of the Now Connect Union, which represents BT middle management, suggested that only the generosity of the voluntary redundancy packages avoided a strike. Unfortunately the result of that generousity is that some highly experienced engineers and network designers took the deal and left BT Global Services, the division now pulling BTs numbers down.

A BT insider recently said to me "...it's like 2001 again, lots of people in the office looking busy; waiting for the storm to hit!"